California Banker March/April 2023

Financial institutions will be forced to make very conservative decisions about transactions initiated by seniors and this may lead to processing delays that will impair anything from the most routine transactions to time sensitive wire transfers.

The measure also raises several questions about how financial in stitutions could even operationalize the measure’s requirements. There are numerous situations where a financial institution could not iden tify fraud. A senior could transfer money to an exploiter using online financial services. In this scenario, the mere fact that an institution provided the online financial plat form could expose them to civil liability under this measure. Simi larly, if a senior provided credential information and the exploiter uses the senior’s own device, a financial institution would have no way to detect that fact and could be deemed to have assisted. While the proponents of this mea sure contend that it helps seniors, we believe it is discriminating because it is based on the premise that, as a class, people 65 and older are not as

capable of making wise financial de cisions as other customers. It forces financial institutions to treat seniors differently and requires a heightened scrutiny on their financial decisions- all so that trial attorneys can sue banks and exhort settlements from them under the guise of consumer protection.

these businesses are ill-equipped to second-guess their customers’ deci sion. Financial institutions, for ex ample, will be forced to make very conservative decisions about trans actions initiated by seniors and this may lead to processing delays that will impair anything from the most routine transactions to time sensitive wire transfers. Because the measure imposes the same civil liability on banks as the actual per petrator of the crime, banks will be forced to apply enhanced scrutiny of transactions.

Jason Lane is vice presi dent and deputy director of government relations for the California Bankers Association and manages California state tax policy for the association, which involves analyzing legisla

tion and regulatory activity, and the develop ment of policy positions for the association. Lane is one of three lobbyists at CBA and, in addition to his primary focus on taxation, he also lobbies on behalf of the association on is sues related to the state budget, and consumer lending legislation.

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CaliforniaBanker | March April 2023