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26.903.22 101st Legislative Session 1238
2026 South Dakota Legislature
House Bill 1238
ENROLLED
AN ACT
ENTITLED An Act to protect financial institutions taking action to prevent the
financial exploitation of consenting, senior, or vulnerable adults.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
Terms used in this chapter mean:
(1) "Account," a contract for the deposit of funds between the depositor and a financial
institution, provided:
(a) The account is owned by a consenting, senior, or vulnerable adult, whether
individually or with one or more other individuals; or
(b) A consenting, senior, or vulnerable adult is a beneficiary of the account;
(2) "Consenting adult," any account holder who consents, in writing, to the financial
institution and its employees responding to any reasonable concern regarding
financial exploitation;
(3) "Financial exploitation," the wrongful or unauthorized taking, withholding,
appropriation, or use of money, assets, or other property, or the identifying
information of a consenting, senior, or vulnerable adult, by any individual or an act
or omission by an individual, including through the use of a power of attorney on
behalf of, or as the conservator or guardian of, a consenting, senior, or vulnerable
adult, to:
(a) Obtain control, through deception, intimidation, fraud, or undue influence
over the consenting, senior, or vulnerable adult's money, assets, or other
property, to deprive the consenting, senior, or vulnerable adult of the
ownership, use, benefit, or possession of the property; or
(b) Convert the money, assets, or other property of a consenting, senior, or
vulnerable adult to deprive the adult of the ownership, use, benefit, or
possession of the property;
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(4) "Financial institution," a bank, savings bank, building and loan association, savings
and loan association, or credit union; any other similar organization that is covered
by federal deposit insurance; a subsidiary or affiliate of any entity listed in thi s
subdivision; or a trust company;
(5) "Senior adult," an individual age sixty-five or older;
(6) "Transaction," any of the following as applicable to services provided by a financial
institution:
(a) A transfer or request to transfer or disburse funds or assets in an account;
(b) A request to initiate a wire transfer, initiate an automated clearinghouse
transfer, or issue a money order, cashier's check, or official check;
(c) A request to negotiate a check or other negotiable instrument;
(d) A request to change the ownership of, or access to, an account;
(e) A request for a loan, guarantee of a loan, extension of credit, or draw on a
line of credit;
(f) A request to encumber any movable or immovable property, including real
property, personal property, or fixtures; and
(g) A request to designate or change the designation of beneficiaries to receive
any property, benefit, or contract right for a consenting, senior, or
vulnerable adult at death; and
(7) "Vulnerable adult," an individual age eighteen or older who has a substantial
mental or functional impairment or for whom a guardian or conservator has been
appointed.
Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
If a financial institution, or an employee of a financial institution, reasonably
believes, or has received information from a state agency or a law enforcement agency
demonstrating that it is reasonable to believe financial exploitation of a consenting, senior,
or vulnerable adult may have occurred, may have been attempted, is occurring, or is being
attempted, the financial institution may:
(1) Delay or refuse a transaction with or involving the consenting, senior, or vulnerable
adult;
(2) Delay or refuse to permit the withdrawal or disbursement of funds contained in the
account of the consenting, senior, or vulnerable adult;
(3) Prevent a change in ownership of the account of a consenting, senior, or vulnerable
adult;
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(4) Prevent a transfer of funds from the account of the consenting, senior, or
vulnerable adult to an account owned wholly or partially by another person;
(5) Refuse to comply with instructions given to the financial institution by an agent or
a person acting for or with an agent under a power of attorney signed or purported
to have been signed by the consenting, senior, or vulnerable adult; or
(6) Prevent the designation or change the designation of beneficiaries to receive any
property, benefit, or contract rights for a consenting, senior, or vulnerable adult at
death.
Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
Neither a financial institution, nor an employee of the institution is required to act
under section 2 of this Act when provided with information alleging that financial
exploitation may have occurred, may have been attempted, is occurring, or is being
attempted, but may use discretion to determine whether or not to act, based on the
information available to the institution or the employee at the time.
Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
A financial institution or an employee of a financial institution may notify any third
party reasonably associated with a consenting, senior, or vulnerable adult, if the institution
or employee reasonably believes that financial exploitation of the adult m ay have
occurred, may have been attempted, is occurring, or is being attempted.
A financial institution or an employee of a financial institution may choose not to
notify any third party reasonably associated with a consenting, senior, or vulnerable adult
of suspected financial exploitation of the adult, if the institution or employee reasonably
believes the third party is, may be, or may have been engaged in the financial exploitation
of the adult, or if requested to refrain from making a notification by a law enforcement
agency on the grounds that the notification could interfere wit h a law enforcement
investigation.
For purposes of this section, a third party reasonably associated with a consenting,
senior, or vulnerable adult means:
(1) A parent, spouse, adult child, sibling, or other known family member or close
associate of the adult;
(2) An authorized contact provided by the adult to the financial institution;
(3) A co-owner, additional authorized signatory, or beneficiary on an adult's account;
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(4) An attorney in fact, trustee, conservator, guardian, or other fiduciary who has been
selected by the adult, a court, or a third party, to manage some or all of the
financial affairs of the adult; and
(5) An attorney known to represent or have represented the adult.
Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
Except as otherwise provided in this section, the authority granted the financial
institution under section 2 of this Act expires upon the earliest of:
(1) Thirty business days after the date on which the financial institution first acted
under section 2;
(2) When the financial institution is satisfied that the transaction or act will not result
in financial exploitation of the consenting, senior, or vulnerable adult; or
(3) Termination by an order of a court of competent jurisdiction.
Unless otherwise directed by order of a court, a financial institution may extend
the duration of authority under this section based on a reasonable belief that the financial
exploitation of a consenting, senior, or vulnerable adult may continue to occur or continue
to be attempted.
Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
A financial institution and its bank holding company, if any, and any employees,
agents, officers, and directors of the financial institution and its bank holding company, if
any, are immune from any civil, criminal, or administrative liability that may ot herwise
exist:
(1) For delaying or refusing to execute a transaction, withdrawal, or disbursement, in
accordance with this chapter;
(2) For not delaying or refusing to execute a transaction, withdrawal, or disbursement
in accordance with this chapter; and
(3) For actions taken in furtherance of determinations made in accordance with this
chapter.
Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 51A:
Notwithstanding any other law, the refusal by a financial institution to engage in a
transaction in accordance with this chapter does not constitute the wrongful dishonor of
an item under § 57A-4-402.
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An Act to protect financial institutions taking action to prevent the financial exploitation of
consenting, senior, or vulnerable adults.
I certify that the attached Act originated in
the:
House as Bill No. 1238
Chief Clerk of the House
Speaker of the House
Attest:
Chief Clerk of the House
President of the Senate
Attest:
Secretary of the Senate
House Bill No. 1238
File No. ____
Chapter No. ______
Received at this Executive Office
this _____ day of _____________,
2026 at ____________M.
By
for the Governor
The attached Act is hereby
approved this ________ day of
______________, A.D., 2026
Governor
STATE OF SOUTH DAKOTA,
ss.
Office of the Secretary of State
Filed ____________, 2026
at _________ o'clock __M.
Secretary of State
By
Asst. Secretary of State