Existing law, establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders.

Existing law requires the department to regulate the offering and provision of consumer financial products or services, and to exercise oversight and enforcement authority, pursuant to these provisions, as specified. Existing law requires the commissioner to prepare and publish on the departments internet website an annual report detailing actions taken during the prior year pursuant to the California Consumer Financial Protection Law. Existing law states that its purpose, among other things, is to protect consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.

This bill would require the department, commencing on or before January 1, 2027, to make available to financial institutions and the general public online resources related to financial abuse of victims of domestic violence for the purpose of protecting the survivors assets and resources, as specified. The bill would authorize the department to utilize existing internet websites, links, and other online resources and materials from state government departments, nonprofit organizations, and community groups, as appropriate, in order the meet the requirement to make the online resources available.

Existing law, establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders.

Existing law requires the department to regulate the offering and provision of consumer financial products or services, and to exercise oversight and enforcement authority, pursuant to these provisions, as specified. Existing law requires the commissioner to prepare and publish on the departments internet website an annual report detailing actions taken during the prior year pursuant to the California Consumer Financial Protection Law. Existing law states that its purpose, among other things, is to protect consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.

This bill would require the department, commencing on or before January 1, 2027, to make available to financial institutions and the general public online resources related to financial abuse of victims of domestic violence for the purpose of protecting the survivors assets and resources, as specified. The bill would authorize the department to utilize existing internet websites, links, and other online resources and materials from state government departments, nonprofit organizations, and community groups, as appropriate, in order the meet the requirement to make the online resources available.

Existing law, establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders.

Existing law requires the department to regulate the offering and provision of consumer financial products or services, and to exercise oversight and enforcement authority, pursuant to these provisions, as specified. Existing law requires the commissioner to prepare and publish on the departments internet website an annual report detailing actions taken during the prior year pursuant to the California Consumer Financial Protection Law. Existing law states that its purpose, among other things, is to protect consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.

This bill would require the department, commencing on or before January 1, 2027, to make available to financial institutions and the general public online resources related to financial abuse of victims of domestic violence for the purpose of protecting the survivors assets and resources, as specified. The bill would authorize the department to, upon appropriation by the Legislature, to utilize existing internet websites, links, and other online resources and materials from state government departments, nonprofit organizations, and community groups groups, as appropriate, in order the meet the requirement to make the online resources available.

Existing law, the California Consumer Financial Protection law, establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders.

Existing law requires the department to regulate the offering and provision of consumer financial products or services, and to exercise oversight and enforcement authority, pursuant to these provisions, as specified. Existing law requires the commissioner to prepare and publish on the departments internet website an annual report detailing actions taken during the prior year pursuant to these provisions. the California Consumer Financial Protection Law. Existing law states that its purpose, among other things, is to protect consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.

This bill would require the department, commencing on or before January 1, 2027, to make available to financial institutions and the general public online resources related to financial abuse of victims of domestic violence for the purpose of protecting the survivors assets and resources, as specified. The bill would authorize the department to, upon appropriation by the Legislature, utilize existing resources and materials from state government departments, nonprofit organizations, and community groups in order the meet the requirement to make the online resources available.

Existing law law, the California Consumer Financial Protection law, establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders. Existing law requires the department to require fingerprint images from any department employee, prospective employee or applicant seeking employment within the department, contractor, subcontractor, volunteer, or vendor who may have access to criminal offender record information. Existing law requires the Department of Justice to forward a request for national-level criminal offender record information to the Federal Bureau of Investigation and compile and disseminate the information returned, as specified. Existing law authorizes the department to assess a fee sufficient to cover the processing costs.

This bill would make a nonsubstantive change to the provisions described above that require the department to require fingerprint images from employees of the department and that require the Department of Justice to forward specified requests to the Federal Bureau of Investigation. require the department, commencing on or before January 1, 2027, to make available to financial institutions and the general public online resources related to financial abuse of victims of domestic violence for the purpose of protecting the survivors assets and resources, as specified. The bill would authorize the department to, upon appropriation by the Legislature, utilize existing resources and materials from state government departments, nonprofit organizations, and community groups in order the meet the requirement to make the online resources available.

Existing law establishes the Department of Financial Protection and Innovation in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Financial Protection and Innovation. Under existing law, the department has charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders. Existing law requires the department to require fingerprint images from any department employee, prospective employee or applicant seeking employment within the department, contractor, subcontractor, volunteer, or vendor who may have access to criminal offender record information. Existing law requires the Department of Justice to forward a request for national-level criminal offender record information to the Federal Bureau of Investigation and compile and disseminate the information returned, as specified. Existing law authorizes the department to assess a fee sufficient to cover the processing costs.

This bill would make a nonsubstantive change to the provisions described above that require the department to require fingerprint images from employees of the department and that require the Department of Justice to forward specified requests to the Federal Bureau of Investigation.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2422

Author:(Grayson)

As Amended Ver:May 21, 2024

Majority vote

SUMMARY

Requires, by January 1, 2027, the Department of Financial Protection and Innovation (DFPI) to make available to financial institutions and the general public online resources on specified topics related to financial abuse of victims of domestic violence.

Senate Amendments

Made minor technical changes.

COMMENTS

Intimate partner violence (IPV) is abuse or aggression that occurs in a romantic relationship. "Intimate partner" refers to both current and former spouses and dating partners. IPV can vary in severity but it remains a common occurrence today. According to the Centers for Disease Control, about one in four women and nearly one in 10 men have reported some form of IPV-related impact, and over 43 million women and 38 million men have reported physiological aggression by an intimate partner in their lifetime.

The personal and societal harm from IPV is well-documented, but the role that economic or financial abuse plays in fostering or perpetuating IPV is often overlooked. For example, an abusive partner may take out debt in the survivor's name, either without the survivor's knowledge or under threat. Such tactics put a survivor in a financially vulnerable situation, often with damaged credit and little ability to be financially independent, leaving them financially reliant on their abusive partners.

This bill seeks to build more institutional and public awareness of financial abuse of domestic violence victims by requiring DFPI to post online resources related to financial abuse of domestic violence victims.

According to the Author

"Financial insecurity is a leading obstacle to safety for survivors of interpersonal violence. A less visible and far too common form of abuse that survivors of IPV are often victimized by is financial abuse. Economic independence is a major key for survivors to be able to successfully leave an abusive relationship. AB 2422 would require DFPI to make available to financial institutions and the public, an online resource page relating to financial abuse of victims of domestic violence for the purpose of protecting the survivors' assets and resources."

Arguments in Support

FreeFrom, a Los-Angeles-based nonprofit that creates pathways to financial security and safety for IPV survivors, is a sponsor of this measure. FreeFrom writes:

"AB 2422 would require Department of Financial Protection and Innovation (DFPI) to make available to financial institutions online resources related to financial abuse of domestic violence survivors with the purpose of protecting survivors' assets and resources. Access to resources can equip financial institutions with the information they need to better understand and serve their survivor customers. California can be leader in taking steps to better support survivors in building financial security and protecting their money and assets so they can heal, rebuild, and thrive. AB 2422 is a step in this direction."

Arguments in Opposition

None received.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, absorbable costs to DFPI to identify and update the DFPI website with appropriate resources.

VOTES:

ASM BANKING AND FINANCE: 8-0-1

YES: Grayson, Chen, Dixon, Mike Fong, Maienschein, Petrie-Norris, Blanca Rubio, Soria

ABS, ABST OR NV: Cervantes

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta

ABS, ABST OR NV: Villapudua

ASSEMBLY FLOOR: 73-0-7

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wicks, Wilson, Wood, Zbur

ABS, ABST OR NV: Calderon, Megan Dahle, Flora, Low, Mathis, Weber, Robert Rivas

SENATE FLOOR: 38-0-2

YES: Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Wahab, Wiener, Wilk

ABS, ABST OR NV: Allen, Umberg

UPDATED

VERSION: May 21, 2024

CONSULTANT: Luke Reidenbach / B. & F. / (916) 319-3081 FN: 0003862

 CONSENT  

Bill No: AB 2422

Author: Grayson (D)

Amended: 5/21/24 in Senate

Vote: 21

SENATE BANKING & F.I. COMMITTEE: 6-0, 6/19/24

AYES: Limón, Niello, Caballero, Min, Nguyen, Portantino

NO VOTE RECORDED: Bradford

ASSEMBLY FLOOR: 73-0, 5/2/24 (Consent) - See last page for vote

SUBJECT: Department of Financial Protection and Innovation: online resources: financial abuse: domestic violence victims

SOURCE: FreeFrom

DIGEST:

This bill requires the Department of Financial Protection and Innovation (DFPI to make available online resources related to financial abuse of victims of domestic violence.

ANALYSIS: Existing law establishes the DFPI as the state agency responsible for executing laws related to banks, credit unions, money transmitters, and persons providing consumer financial products or services, among others. (Financial Code Section 300)

This bill:

1. Requires, as of January 1, 2027, DFPI to make available online resources related to financial abuse of victims of domestic violence for the purpose of protecting survivors’ assets and resources. Provides that the resources shall include, but not be limited to, information related to all of the following:
   1. The nexus between domestic violence and financial security.
   2. The prevalence and impacts of financial abuse as it relates to domestic violence and a survivor’s employment and credit history.
   3. The heightened need to protect the privacy and to respect the integrity of each individual survivor customer of a financial institution.
   4. The heightened need to respect the autonomy and agency of each individual survivor customer, including the survivor customer’s decision whether to inform law enforcement of the financial abuse.
2. Authorizes DFPI to utilize existing resources and materials from state government departments, nonprofit organizations, and community groups in order to meet the requirement described in 1).
3. Provides that the provisions of this bill do not require financial institutions to become mandated reporters of domestic violence.
4. Requires DFPI to annually review and update the resources described in 1).

Comments

1. Purpose. According to the author, AB 2422 would require the Department of Financial Protection and Innovation (DFPI) to make available to financial institutions and the public, an online resource page relating to financial abuse of victims of domestic violence for the purpose of protecting the survivors’ assets and resources.
2. Background. According to information provided by the author’s office, financial insecurity is a leading obstacle to safety for survivors of interpersonal violence (IPV). A less visible and far too common form of abuse that survivors of IPV are often victimized by is financial abuse. Financial abuse can take many forms, including a harm-doer reducing savings accounts or assets, restricting access to bank accounts, and incurring coerced and fraudulent debt. According to a national poll conducted by the AllState Foundation, in 99% of these cases financial abuse is one of the main reasons victims are unable to leave abusive relationships. In fact, the financial devastation of abuse makes banking products unaffordable, and survivors can’t safely save the money they need nor do they have access to the cash needed to leave. A 2018 Centers for Disease Control study found that female survivors pay on average $103,000 for expenses related to domestic violence.

In 2022, the Legislature passed and the Governor signed SB 975 (Min, Chapter 989, Statutes of 2022) creating a non-judicial process for addressing a debt incurred in the name of a debtor through duress, intimidation, threat, force, or fraud of the debtor’s resources or personal information for personal gain. The bill also created a cause of action through which a debtor can enjoin a creditor from holding the debtor personally liable for such “coerced debts” and a cause of action against the perpetrator in favor of the claimant.

1. Requirements of this bill. To achieve the purpose of protecting the assets and resources of survivors of domestic violence, this bill requires DFPI to make available online resources related to financial abuse of victims of domestic violence. The department may utilize existing resources and materials from state government departments, nonprofit organizations, and community groups.

The underlying assumption of this bill appears to be that a factor contributing to the problem of financial abuse of survivors of interpersonal violence is a lack of information – both on the parts of financial institutions specifically and the general public more broadly. Background materials provided by the author’s office do not clearly reveal the extent to which a lack of information contributes to the targeted problem, nor whether DFPI is the best collector and provider of such information.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/5/24)

FreeFrom (source)

California Credit Union League

OPPOSITION: (Verified 8/5/24)

None received

ARGUMENTS IN SUPPORT: FreeFrom, sponsor of this bill, writes in support:

The current financial system is clearly insufficient to protect survivors from fraud and other forms of economic abuse. In fact, 64% of survivors report receiving no or unhelpful support from their bank. Financial institutions have the opportunity to implement supportive systems, products, and training to help millions of customers across the United States build the assets they need to keep themselves and their families safe. Most importantly, 51% of survivors would seek support if they knew their bank offered services for survivors. Trained financial institutions can and must play an essential role in protecting and keeping survivors’ money and assets safe and free from economic abuse.

“When you’re a survivor you worry a lot about people’s reactions to your abuse. Having people who are trained in spotting [economic abuse] and are trained to act in a way that supports survivors would make me feel more comfortable, less judged, and less stressed.” – a Survivor

AB 2422 would require Department of Financial Protection and Innovation (DFPI) to make available to financial institutions online resources related to financial abuse of domestic violence survivors with the purpose of protecting survivors’ assets and resources. Access to resources can equip financial institutions with the information they need to better understand and serve their survivor customers. California can be leader in taking steps to better support survivors in building financial security and protecting their money and assets so they can heal, rebuild, and thrive. AB 2422 is a step in this direction.

ASSEMBLY FLOOR: 73-0, 5/2/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wicks, Wilson, Wood, Zbur

NO VOTE RECORDED: Calderon, Megan Dahle, Flora, Low, Mathis, Weber, Robert Rivas

Prepared by: Michael Burdick / B. & F.I. /

8/6/24 16:10:53

**** END ****

SENATE COMMITTEE ON

BANKING AND FINANCIAL INSTITUTIONS

Senator Monique Limón, Chair

2023 - 2024 Regular

Bill No: AB 2422 Hearing Date: June 19, 2024

Subject: Department of Financial Protection and Innovation: online resources: financial abuse: domestic violence victims

SUMMARY

This bill requires the Department of Financial Protection and Innovation to make available online resources related to financial abuse of victims of domestic violence.

EXISTING LAW

Establishes the Department of Financial Protection and Innovation (DFPI) as the state agency responsible for executing laws related to banks, credit unions, money transmitters, and persons providing consumer financial products or services, among others. (Financial Code Section 300)

THIS BILL

1. Requires, as of January 1, 2027, DFPI to make available online resources related to financial abuse of victims of domestic violence for the purpose of protecting survivors’ assets and resources. Provides that the resources shall include, but not be limited to, information related to all of the following:
   1. The nexus between domestic violence and financial security.
   2. The prevalence and impacts of financial abuse as it relates to domestic violence and a survivor’s employment and credit history.
   3. The heightened need to protect the privacy and to respect the integrity of each individual survivor customer of a financial institution.
   4. The heightened need to respect the autonomy and agency of each individual survivor customer, including the survivor customer’s decision whether to inform law enforcement of the financial abuse.
2. Authorizes DFPI to utilize existing resources and materials from state government departments, nonprofit organizations, and community groups in order to meet the requirement described in #1.
3. Provides that the provisions of this bill do not require financial institutions to become mandated reporters of domestic violence.
4. Requires DFPI to annually review and update the resources described in #1.

COMMENTS

1. PURPOSE

According to the author, AB 2422 would require the Department of Financial Protection and Innovation (DFPI) to make available to financial institutions and the public, an online resource page relating to financial abuse of victims of domestic violence for the purpose of protecting the survivors’ assets and resources.

1. BACKGROUND

According to information provided by the author’s office, financial insecurity is a leading obstacle to safety for survivors of interpersonal violence (IPV). A less visible and far too common form of abuse that survivors of IPV are often victimized by is financial abuse. Financial abuse can take many forms, including a harm-doer reducing savings accounts or assets, restricting access to bank accounts, and incurring coerced and fraudulent debt. According to a national poll conducted by the AllState Foundation, in 99% of these cases financial abuse is one of the main reasons victims are unable to leave abusive relationships. In fact, the financial devastation of abuse makes banking products unaffordable, and survivors can’t safely save the money they need nor do they have access to the cash needed to leave. A 2018 Centers for Disease Control study found that female survivors pay on average $103,000 for expenses related to domestic violence.

In 2022, the Legislature passed and the Governor signed SB 975 (Min, Chapter 989, Statutes of 2022) creating a non-judicial process for addressing a debt incurred in the name of a debtor through duress, intimidation, threat, force, or fraud of the debtor’s resources or personal information for personal gain. The bill also created a cause of action through which a debtor can enjoin a creditor from holding the debtor personally liable for such “coerced debts” and a cause of action against the perpetrator in favor of the claimant.

1. REQUIREMENTS OF THIS BILL

To achieve the purpose of protecting the assets and resources of survivors of domestic violence, this bill requires DFPI to make available online resources related to financial abuse of victims of domestic violence. The department may utilize existing resources and materials from state government departments, nonprofit organizations, and community groups.

The underlying assumption of the bill appears to be that a factor contributing to the problem of financial abuse of survivors of interpersonal violence is a lack of information – both on the parts of financial institutions specifically and the general public more broadly. Background materials provided by the author’s office do not clearly reveal the extent to which a lack of information contributes to the targeted problem, nor whether DFPI is the best collector and provider of such information.

1. ARGUMENTS IN SUPPORT

FreeFrom, sponsor of this bill, writes in support:

The current financial system is clearly insufficient to protect survivors from fraud and other forms of economic abuse. In fact, 64% of survivors report receiving no or unhelpful support from their bank. Financial institutions have the opportunity to implement supportive systems, products, and training to help millions of customers across the United States build the assets they need to keep themselves and their families safe. Most importantly, 51% of survivors would seek support if they knew their bank offered services for survivors. Trained financial institutions can and must play an essential role in protecting and keeping survivors’ money and assets safe and free from economic abuse.

“When you’re a survivor you worry a lot about people’s reactions to your abuse. Having people who are trained in spotting [economic abuse] and are trained to act in a way that supports survivors would make me feel more comfortable, less judged, and less stressed.” – a Survivor

AB 2422 would require Department of Financial Protection and Innovation (DFPI) to make available to financial institutions online resources related to financial abuse of domestic violence survivors with the purpose of protecting survivors’ assets and resources. Access to resources can equip financial institutions with the information they need to better understand and serve their survivor customers. California can be leader in taking steps to better support survivors in building financial security and protecting their money and assets so they can heal, rebuild, and thrive. AB 2422 is a step in this direction.

LIST OF REGISTERED SUPPORT/OPPOSITION

Support

FreeFrom (sponsor)

California Credit Union League

Opposition

None received

-- END --

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2422

Author:(Grayson) – As Amended Ver:March 20, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires, by January 1, 2027, the Department of Financial Protection and Innovation (DFPI) to make resources related to financial abuse of victims of domestic violence available online to financial institutions and the public.

Specifically, this bill:

1. Requires DFPI’s online resources regarding financial abuse of domestic violence victims to address certain topics, such as the nexus between domestic violence and financial security and information regarding the heightened need to protect the privacy and to respect the integrity of each survivor customer
2. Authorizes DFPI, upon appropriation, to utilize existing resources and materials from state government departments, non-profit organizations, and community groups to meet the online resources requirement.
3. Requires DFPI to annually review and update the online resources.

FISCAL EFFECT:

Absorbable costs to DFPI to identify and update the DFPI website with appropriate resources.

COMMENTS:

1. Purpose. According to the author:

Economic independence is a major key for survivors to be able to successfully leave an abusive relationship. AB 2422 would require DFPI to make available to financial institutions and the public, an online resource page relating to financial abuse of victims of domestic violence for the purpose of protecting the survivors’ assets and resources.

This bill is sponsored by Freeform and supported by the California Credit Union League.

1. Financial Abuse as a Form of Domestic Violence. A 2018 poll conducted by the Allstate Foundation found only 22% of respondents reported being familiar with financial abuse as a form of domestic violence. For example, an abusive partner may take out debt in the survivor’s name, either without the survivor’s knowledge or under threat. Such tactics put a survivors in a financially vulnerable situation, often with damaged credit and little ability to be financially independent, leaving survivors financially reliant on their abusive partners.

While a myriad of federal and state laws exist to prohibit financial abuse of elders and dependents, recent policy initiatives increasingly focus on early prevention by empowering intervention by financial institutions. In that vein, this bill seeks to build more institutional and public awareness of financial abuse of domestic violence victims by requiring DFPI to post online resources related to financial abuse of domestic violence victims. Although this bill states DFPI may, “upon appropriation,” utilize existing stakeholder resources to meet this resource-sharing requirement, the author clarifies the intent is not to suggest DFPI should seek an appropriation for an external contract or, alternatively, collaborate with an external entity only if an appropriation is made for such a purpose. Rather, the author simply intends to encourage DFPI to leverage existing external resources before creating any new unique informational materials.

1. Prior Legislation. SB 975 (Min), Chapter 989, Statutes of 2021, created a non-judicial process by which a victim of domestic violence, a victim of elder or dependent abuse, or a foster youth can be relieved of liability for coerced debts.

AB 1841 (Grayson), of the 2021-22 Legislative Session, would have required DFPI to implement and administer an online training program for officers and employees of financial institutions regarding the economic abuse of domestic violence victims. AB 1841 was held on this committee’s suspense file.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 1, 2024

ASSEMBLY COMMITTEE ON BANKING AND FINANCE

Timothy Grayson, Chair

ABPCA Bill Id:AB 2422 (

Author:Grayson) – As Amended Ver:March 20, 2024

SUBJECT: Department of Financial Protection and Innovation: online resources: financial abuse: domestic violence victims

SUMMARY: Requires, by January 1, 2027, the Department of Financial Protection and Innovation (DFPI) to make available to financial institutions and the general public online resources on specified topics related to financial abuse of victims of domestic violence.

Specifically, this bill:

1. Requires DFPI to make available to financial institutions and the general public online resources related to financial abuse of victims of domestic violence for the purpose of protecting survivors’ assets and resources. DFPI must first make these resources available no later than January 1, 2027, and DFPI must then annually review and update those resources.
2. Requires the online resources to include at least the following:
3. Information on the nexus between domestic violence and financial security.
4. Information on the prevalence and impacts of financial abuse as it related to domestic violence and survivors employment and credit history.
5. Information regarding the heightened need to protect the privacy and to respect the integrity of each individual survivor customer of a financial institution.
6. Information regarding the heightened need to respect the autonomy an agency of each individual survivor customer.
7. Authorizes the department to use existing resources and materials from state government departments, nonprofit organizations, and community groups.

EXISTING LAW:

1. Establishes the Elder Abuse and Dependent Adult Civil Protection Act to makes all officers and employees of financial institutions, as defined, mandated reporters of suspected financial abuse of an elder or dependent adult (Welfare and Institutions Code Section 15630.1).
   
2. Provides that “suspected financial abuse of an elder or dependent adult” occurs when a mandated reporter observes or has knowledge of behavior or unusual circumstances or transactions, or a pattern of behavior or unusual circumstances or transactions, that would lead an individual with like training or experience, based on the same facts, to form a reasonable belief that an elder or dependent adult is the victim of financial abuse, as defined (Welfare and Institutions Code Section 15630.1).
3. Creates a new section of law, separate from but based on the section currently applicable to banks and credit unions, which makes broker-dealers, as defined in Section 25004 of the Corporations Code, and investment advisors, as defined in Section 25009 of the Corporations Code mandated reporters of suspected financial abuse of an elder or dependent adult. Requires reporting when a broker-dealer or investment advisor observes or has knowledge of an incident that reasonably appears to be financial abuse or when the person reasonably believes the existence of that abuse.

FISCAL EFFECT: Unknown. This bill is keyed Fiscal by Legislative Counsel.

COMMENTS:

1. Purpose.

According to the author:

Financial insecurity is a leading obstacle to safety for survivors of interpersonal violence. A less visible and far too common form of abuse that survivors of IPV are often victimized by is financial abuse. Economic independence is a major key for survivors to be able to successfully leave an abusive relationship. AB 2422 would require DFPI to make available to financial institutions and the public, an online resource page relating to financial abuse of victims of domestic violence for the purpose of protecting the survivors’ assets and resources.

1. Background: Economic or financial abuse of domestic violence victims.

Intimate partner violence (IPV) is abuse or aggression that occurs in a romantic relationship.^[1] “Intimate partner” refers to both current and former spouses and dating partners. IPV can vary in severity but it remains a common occurrence today. According to the Center for Disease Control, about 1 in 4 women and nearly 1 in 10 men have reported some form of IPV-related impact, and over 43 million women and 38 million men have reported physiological aggression by an intimate partner in their lifetime.^[2]

The personal and societal harm from IPV is well-documented, but the role that economic or financial abuse plays in fostering or perpetuating IPV is less understood. In a 2018 poll conducted by the Allstate Foundation, just 22% of respondents reported being familiar with financial abuse as a form of domestic violence.^[3]

This lack of awareness is especially important given how common it is for an IPV survivor to endure some type of correlated financial economic abuse. In a 2011 study of IPV survivors participating in a financial literacy program, 94% experienced some form of economic abuse, which also correlated highly with other forms of IPV. In that same study, 79% of survivors experienced economic exploitative behaviors, and 78% experienced employment sabotage.^[4] In some situations, a survivor takes on coerced debt, meaning a debt that an abusive partner has taken out in the survivor’s name either without their knowledge or under threat. In other situations, the abuse partner engages in simple and outright theft.^[5] These tactics leave survivors in a financially vulnerable situation, often with damaged credit and little ability to be financially independent. This can leave a survivor financially reliant on the abusive partner.

1. Background: Elder and dependent adult financial abuse.

AB 2422 follows decades of efforts to prevent the financial abuse of seniors and dependent adults. These efforts can help inform future legislative work aiming to prevent financial abuse of IPV survivors.

Elder and dependent adult financial abuse can materialize in different ways, such as through the improper use of funds through fraud, falsifying records, or manipulation or coercion. Elder financial abuse is alarmingly prevalent, with older individuals often falling victim to financial exploitation perpetrated by family members or other parties, such as contractors. This susceptibility may arise from their possession of substantial assets or home equity, coupled with factors like social isolation or health-related vulnerabilities.

While a myriad of federal and state laws exist to prohibit elder financial abuse, recent policy initiatives have increasingly focused on early prevention by empowering or mandating intervention by financial institutions. Some states have mandated reporter laws, which require financial institutions to report to law enforcement instances of elder abuse.^[6] In California, the Elder Abuse and Dependent Adult and Civil Protection Law includes mandatory reporting provisions. ^[7] Federally, the Senior Safe Act of 2018 grants certain immunity to employees of financial institutions who report instances of exploitation against senior citizens, provided they undergo specified training.^[8]

Mandated reporting has been a key component of the policy response to elder financial abuse, but its efficacy has recently been called into question. For one, there appears to be a widening gap between the number of cases being reported by financial institutions and the capacity of local adult protective service agencies or law enforcement agencies to follow up. Second, advocates argue that financial institutions are in the best position to stop the fraud or abuse before it even happens, and state policy needs to harness this opportunity for the protection of seniors. For example, under Minnesota law, a financial institution is required to temporarily hold a transaction if the state regulator determines that the transaction is the result of financial abuse.

1. Coerced debt

The Legislature has started to pay closer attention to the impact of financial abuse on IPV survivors, and recent legislation (SB 975 (Min), Chapter 989, Statutes of 2021) creates a non-judicial process by which survivors can be relieved of liability for debts they were coerced into entering. Specifically, under SB 975, a survivor may submit to a claimant, such as a lender or debt collector, documentation supporting a statement that the debt is coerced, thereby initiating a review by the claimant during which collection is ceased.

In writing in support of the measure, the Little Hoover Commission argued:

…many survivors of abuse face overwhelming amounts of debt from credit cards and loans taken out in their name without their permission, and consequently struggle to establish a life away from their abuser. Helping survivors establish economic independence is essential to their ability to successfully leave an abusive relationship.

1. Previous legislation.

AB 1841 (Grayson), of the 2021-22 Legislative Session, would have required DFPI to implement and administer an online training program for officers and employees of financial institutions regarding the economic abuse of domestic violence victims. AB 1841 was held on Assembly Appropriation Committee’s Suspense File.

1. Support.

AB 2422 is sponsored by FreeFrom, a Los Angeles-based nonprofit that creates pathways to finical security and safety for IPV survivors. FreeFrom writes:

AB 2422 would require Department of Financial Protection and Innovation (DFPI) to make available to financial institutions online resources related to financial abuse of domestic violence survivors with the purpose of protecting survivors’ assets and resources. Access to resources can equip financial institutions with the information they need to better understand and serve their survivor customers. California can be leader in taking steps to better support survivors in building financial security and protecting their money and assets so they can heal, rebuild, and thrive. AB 2422 is a step in this direction.

The California Credit Union League also writes in support, writing that “AB 2422 is an important step that California can take to provide resources for both financial institutions and victims of financial abuse.”

REGISTERED SUPPORT / OPPOSITION:

Support

Freefrom (Sponsor)

California Credit Union League

Opposition

None on file.

Analysis Prepared by: Luke Reidenbach / B. & F. / (916) 319-3081

1. IPV is the term used in this analysis, though AB 2422 uses the term domestic abuse. These terms are often used interchangeably, though domestic violence may also include abuse or aggression from non-intimate partners in the household, such as from a sibling. ↑

2. “Preventing Intimate Partner Violence,” Center for Disease Control and Prevention (Updated November 2021), available at https://www.cdc.gov/violenceprevention/intimatepartnerviolence/fastfact.html. ↑

3. “2018 National Poll on Domestic Violence and Financial Abuse,” Allstate Foundation (March 2018), available at https://allstatefoundation.org/wp-content/uploads/2020/03/2018-Research-Deck_Final.pdf. ↑

4. Judy Postmus et al, “Understanding Economic Abuse in the Lives of Survivors,” Journal of Interpersonal Violence (2011), available at https://journals.sagepub.com/doi/10.1177/0886260511421669. ↑

5. A.E. Adams et al, “The Frequency, Nature, and Effects of Coerced Debt Among a National Sample of Women Seeking Help for Intimate Partner Violence,” Violence Against Women (2019), available at https://doi.org/10.1177/1077801219841445.   ↑

6. See a list if relevant federal statutes here: https://www.justice.gov/elderjustice/prosecutors/statutes ↑

7. As an example, see http://hss.sbcounty.gov/DAAS/docs/ElderFinancialAbusePowerPoint.ppt; The CDSS also provides a generalized elder abuse training module that local agencies can use: https://cdss.ca.gov/MandatedReporting/story_html5.html ↑

8. See fact sheet here: https://www.investor.gov/senior-safe-act-fact-sheet ↑