Financial fraud protections

AN ACT Relating to enhancing consumer protections against 1
financial fraud; amending RCW 74.34.215, 30A.22.210, and 30A.22.020; 2
adding a new section to chapter 30A.22 RCW; and adding a new section 3
to chapter 21.20 RCW. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 74.34.215 and 2010 c 133 s 3 are each amended to 6
read as follows: 7
(1) Pending an investigation by the financial institution, the 8
department, or law enforcement, if a financial institution reasonably 9
believes that financial exploitation of a vulnerable adult may have 10
occurred, may have been attempted, or is being attempted, the 11
financial institution shall immediately notify the department and the 12
department of financial institutions, comply with subsection (8) of 13
this section, and may, but is not required to, refuse a transaction 14
requiring disbursal of funds contained in the account:15
(a) Of the vulnerable adult; 16
(b) On which the vulnerable adult is a beneficiary, including a 17
trust or guardianship account; or 18
(c) Of a person suspected of perpetrating financial exploitation 19
of a vulnerable adult. 20
H-1210.1
HOUSE BILL 1900
State of Washington 69th Legislature 2025 Regular Session
By Representatives Doglio, Berry, Parshley, Simmons, Ormsby, Ramel,
Hill, Macri, and Pollet
Read first time 02/07/25. Referred to Committee on Consumer
Protection & Business.
p. 1 HB 1900
(2) A financial institution may also refuse to disburse funds 1
under this section if the department, law enforcement, or the 2
prosecuting attorney's office provides information to the financial 3
institution demonstrating that it is reasonable to believe that 4
financial exploitation of a vulnerable adult may have occurred, may 5
have been attempted, or is being attempted. 6
(3) A financial institution is not required to refuse to disburse 7
funds when provided with information alleging that financial 8
exploitation may have occurred, may have been attempted, or is being 9
attempted, but may use its discretion to determine whether or not to 10
refuse to disburse funds based on the information available to the 11
financial institution. 12
(4) A financial institution that refuses to disburse funds based 13
on a reasonable belief that financial exploitation of a vulnerable 14
adult may have occurred, may have been attempted, or is being 15
attempted shall: 16
(a) Make a reasonable effort to notify all parties authorized to 17
transact business on the account orally or in writing; and18
(b) Report the incident to the adult protective services division 19
of the department and local law enforcement. 20
(5) Any refusal to disburse funds as authorized by this section 21
based on the reasonable belief of a financial institution that 22
financial exploitation of a vulnerable adult may have occurred, may 23
have been attempted, or is being attempted will expire upon the 24
sooner of: 25
(a) Ten business days after the date on which the financial 26
institution first refused to disburse the funds if the transaction 27
involved the sale of a security or offer to sell a security, as 28
defined in RCW 21.20.005, unless sooner terminated by an order of a 29
court of competent jurisdiction; 30
(b) Five business days after the date on which the financial 31
institution first refused to disburse the funds if the transaction 32
did not involve the sale of a security or offer to sell a security, 33
as defined in RCW 21.20.005, unless sooner terminated by an order of 34
a court of competent jurisdiction; or 35
(c) The time when the financial institution is satisfied that the 36
disbursement will not result in financial exploitation of a 37
vulnerable adult. 38
(6) A court of competent jurisdiction may enter an order 39
extending the refusal by the financial institution to disburse funds 40
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based on a reasonable belief that financial exploitation of a 1
vulnerable adult may have occurred, may have been attempted, or is 2
being attempted. A court of competent jurisdiction may also order 3
other protective relief as authorized by RCW 7.40.010 and 4
((74.34.130)) 7.105.310. 5
(7) A financial institution or an employee of a financial 6
institution is immune from criminal, civil, and administrative 7
liability for refusing to disburse funds or disbursing funds under 8
this section and for actions taken in furtherance of that 9
determination if the determination of whether or not to disburse 10
funds was made in good faith. 11
(8) A financial institution that notifies the department and the 12
department of financial institutions as provided in subsection (1) of 13
this section shall place an internal flag on the account of the 14
vulnerable adult to notify employees of the financial institution 15
with access to the account that:16
(a) Financial exploitation of a vulnerable adult may have 17
occurred, may have been attempted, or is being attempted;18
(b) The department and the department of financial institutions 19
have been notified; and20
(c) Washington law authorizes a financial institution to refuse a 21
transaction requiring disbursal of funds when financial exploitation 22
of a vulnerable adult may have occurred, may have been attempted, or 23
is being attempted.24
Sec. 2. RCW 30A.22.210 and 2010 c 133 s 1 are each amended to 25
read as follows: 26
(1) Nothing contained in this chapter shall be deemed to require 27
any financial institution to make any payment from an account to a 28
depositor, or any trust or P.O.D. account beneficiary, or any other 29
person claiming an interest in any funds deposited in the account, if 30
the financial institution has actual knowledge of the existence of a 31
dispute between the depositors, beneficiaries, or other persons 32
concerning their respective rights of ownerships to the funds 33
contained in, or proposed to be withdrawn, or previously withdrawn 34
from the account, or in the event the financial institution is 35
otherwise uncertain as to who is entitled to the funds pursuant to 36
the contract of deposit. In any such case, the financial institution 37
may, without liability, notify, in writing, all depositors, 38
beneficiaries, or other persons claiming an interest in the account 39
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of either its uncertainty as to who is entitled to the distributions 1
or the existence of any dispute, and may also, without liability, 2
refuse to disburse any funds contained in the account to any 3
depositor, and/or trust or P.O.D. account beneficiary thereof, and/or 4
other persons claiming an interest therein, until such time as 5
either: 6
(a) All such depositors and/or beneficiaries have consented, in 7
writing, to the requested payment; or 8
(b) The payment is authorized or directed by a court of proper 9
jurisdiction. 10
(2) If a financial institution reasonably believes that financial 11
exploitation of a vulnerable adult, as defined in RCW 74.34.020, may 12
have occurred, may have been attempted, or is being attempted, the 13
financial institution may refuse a transaction as permitted under RCW 14
74.34.215. 15
(3) If a financial institution reasonably believes that financial 16
fraud of an individual in relation to funds in an account may have 17
occurred, may have been attempted, or is being attempted, the 18
financial institution shall immediately notify the department of 19
financial institutions. This subsection may apply, but is not limited 20
to, circumstances when the real owner of an account seeks to engage 21
or engages in a withdrawal or other transaction or series of 22
transactions that are substantially different in nature than 23
withdrawals or transactions in the account's history.24
NEW SECTION. Sec. 3. A new section is added to chapter 30A.22 25
RCW to read as follows: 26
(1) Financial institutions with accounts of individual account 27
owners in this state shall have policies and procedures to allow 28
employees to place an internal flag on an account to notify other 29
employees of the financial institution who have access to the 30
individual's account that an interaction or a transaction with an 31
individual account owner, or someone presenting themselves as the 32
individual account owner, caused a reasonable belief that financial 33
fraud of the individual account owner may have occurred, may have 34
been attempted, or is being attempted. This subsection may apply, but 35
is not limited to, circumstances when the real owner of an account 36
seeks to engage or engages in a withdrawal or other transaction or 37
series of transactions that are substantially different in nature 38
than withdrawals or transactions in the account's history.39
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(2) The placement of an internal flag on an account pursuant to 1
this section is for purposes of internal use by the financial 2
institution only and does not require a financial institution to 3
withhold funds or refuse to engage in a transaction, or create any 4
legal liability on the part of an employee acting in good faith 5
placing an internal flag on an account. 6
Sec. 4. RCW 30A.22.020 and 1981 c 192 s 2 are each amended to 7
read as follows: 8
The purposes of this chapter are: 9
(1) To provide a consistent law applicable to all financial 10
institutions authorized to accept deposits from individuals with 11
respect to payments by the institutions to individuals claiming 12
rights to the deposited funds; and 13
(2) To qualify and simplify the law concerning the respective 14
ownership interests of individuals to funds held on deposit by 15
financial institutions, both as to the relationship between the 16
individual depositors and beneficiaries of an account, and to the 17
financial institution-depositor-beneficiary relationships; ((and))18
(3) To simplify and make consistent the law pertaining to 19
payments by financial institutions of deposited funds both before and 20
after the death of a depositor or depositors, including provisions 21
for the validity and effect of certain nontestamentary transfers of 22
deposits upon the death of one or more depositors; and23
(4) To assist in preventing fraud of an individual account owner 24
related to the individual's funds in an account. 25
NEW SECTION. Sec. 5. A new section is added to chapter 21.20 26
RCW to read as follows: 27
(1) If a broker-dealer, investment adviser, or investment adviser 28
representative reasonably believes that financial fraud of an 29
individual in relation to securities or funds in an account may have 30
occurred, may have been attempted, or is being attempted, the broker-31
dealer, investment adviser, or investment adviser representative 32
shall immediately notify the department of financial institutions.33
(2) Broker-dealers, investment advisers, and investment adviser 34
representatives shall have policies and procedures to allow the 35
placement of an internal flag on an account to notify other employees 36
in the organization that an interaction or a transaction with a 37
client, or someone presenting themselves as a client caused a 38
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reasonable belief that financial fraud of the client may have 1
occurred, may have been attempted, or is being attempted.2
(3) This section may apply, but is not limited to, circumstances 3
when the real owner of an account seeks to engage or engages in a 4
sale of a security or withdrawal of funds that are substantially 5
different in nature than transactions or withdrawals in the account's 6
history. 7
(4) The placement of an internal flag on an account pursuant to 8
this section is for purposes of internal use by the organization of 9
the broker-dealer, investment adviser, and investment adviser 10
representative only and does not require the withholding of funds or 11
refusal to engage in a transaction or create any legal liability on 12
the part of an individual broker-dealer, investment adviser, 13
investment adviser representative, or employee, while acting in good 14
faith. 15
NEW SECTION. Sec. 6. If any provision of this act or its 16
application to any person or circumstance is held invalid, the 17
remainder of the act or the application of the provision to other 18
persons or circumstances is not affected.19
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