I 

112TH CONGRESS 

1ST SESSION H. R. 370 

To require financial institutions to offer services to protect seniors from 

affinity scams, to report suspected affinity scams, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 20, 2011 

Mr. BACA introduced the following bill; which was referred to the Committee 

on Financial Services, and in addition to the Committee on Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To require financial institutions to offer services to protect 

seniors from affinity scams, to report suspected affinity 

scams, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Preventing Affinity 

5 Scams for Seniors Act of 2011’’ or the ‘‘PASS Act of 

6 2011’’. 

7 SEC. 2. FINDINGS. 

8 The Congress finds the following: 


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1 (1) Financial exploitation of the elderly is be2 coming an increasingly familiar problem. Regular re3 view of news headlines reveals that elders and vul4 nerable adults are victimized routinely by frauds and 

5 scams at the hands of strangers as well as loved 

6 ones. 

7 (2) Older individuals may be targeted merely 

8 because they possess more assets, such as savings, 

9 annuities, and retirement accounts, stocks and 

10 bonds, insurance policies, and property than younger 

11 people. People over 50 years of age control at least 

12 70 percent of the net worth of the Nation’s house13 holds. 

14 (3) Those elders with cognitive impairments, 

15 mental health conditions, or physical disabilities may 

16 be dependent upon others (family members, friends, 

17 formal and informal caregivers, or court-appointed 

18 representatives) for assistance in making financial 

19 decisions or carrying out daily transactions, and 

20 therefore may be even more vulnerable to theft, ex21 ploitation, or undue influence. 

22 (4) Affinity scams on seniors involve trans23 actions in which a person trusted by the senior uses 

24 the relationship to defraud the senior. Millions of el25 derly are scammed each year, losing at least 


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1 $2,600,000,000 a year to thieves, many of whom are 

2 in their own families (conservative estimate given of 

3 the schemes left unreported). 

4 (5) Elder financial abuse is commonly linked 

5 with other forms of abuse and neglect and threatens 

6 the health, dignity, and economic security of millions 

7 of older Americans. Elder financial abuse has re8 ceived limited attention because it is not regarded as 

9 visible, life-threatening, or newsworthy as is the 

10 physical or sexual abuse of elders. 

11 (6) Financial exploitation can be devastating to 

12 the victim and is often traced to family members, 

13 trusted friends, or caregivers. Financial abuse often 

14 occurs with the implied acknowledgment and consent 

15 of the elder person and can be more difficult to de16 tect. 

17 (7) Elder financial abuse affects elders and 

18 their families in significant and long-lasting ways by 

19 putting enormous emotional duress on the elders, in20 creasing their risk of depression, decreasing their 

21 quality of life, and increasing unnecessary institu22 tionalization. 

23 (8) The financial services industry is often the 

24 first to detect a change in the pattern of customers 

25 with whom they have regular contact. This puts inVerDate Mar 15 2010 02:08 Jan 21, 2011 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H370.IH H370

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1 stitutions in a unique position to assist in protecting 

2 customers and upholding the inherent trust relation3 ship with clients. 

4 SEC. 3. DEFINITIONS. 

5 For purposes of this Act: 

6 (1) AFFINITY SCAM.—The term ‘‘affinity scam’’ 

7 means a transaction in which a person trusted by a 

8 senior, such as a caregiver, relative, guardian, ‘‘new 

9 friend’’, or service provider, claims to share similar 

10 interests or values with the senior, establishes a rela11 tionship with the senior (either on the person’s own 

12 initiative or through some other method, such as a 

13 court-appointed guardianship), and then uses the re14 lationship to defraud the senior. 

15 (2) FINANCIAL INSTITUTION.—The term ‘‘fi16 nancial institution’’ means— 

17 (A) an insured bank (as defined in section 

18 3(h) of the Federal Deposit Insurance Act (12 

19 U.S.C. 1813(h)); 

20 (B) a credit union; and 

21 (C) a thrift institution. 

22 (3) SENIOR.—The term ‘‘senior’’ means an in23 dividual who is at least 65 years of age. 


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1 SEC. 4. AFFINITY SCAM EDUCATION AND TRAINING. 

2 (a) STAFF EDUCATION AND TRAINING.—Each finan3 cial institution shall— 

4 (1) educate the staff of the financial institution 

5 about affinity scams and how to identify trans6 actions that may be part of an affinity scam; and 

7 (2) train staff members on educating seniors 

8 about affinity scams. 

9 (b) SENIOR CUSTOMER EDUCATION.—Each financial 

10 institution shall provide educational materials and other 

11 information to seniors who maintain a deposit account 

12 with the financial institution about affinity scams and how 

13 to identify transactions that may be part of an affinity 

14 scam. 

15 (c) EDUCATION AND TRAINING OVERSIGHT.—The 

16 Bureau of Consumer Financial Protection shall— 

17 (1) issue such regulations as are necessary to 

18 carry out this section; and 

19 (2) periodically audit financial institutions to 

20 ensure compliance with such regulations. 

21 SEC. 5. SENIOR PROTECTION ACCOUNTS. 

22 (a) IN GENERAL.—Each financial institution shall 

23 offer seniors a type of checking account to be known as 

24 a ‘‘senior protection account’’. 

25 (b) SENIOR PROTECTION ACCOUNT REQUIRE26 MENTS.— 


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1 (1) IN GENERAL.—With respect to a senior who 

2 maintains a senior protection account with a finan3 cial institution, if the financial institution receives a 

4 transaction request to debit such account and, be5 fore processing the transaction, the financial institu6 tion identifies the transaction as possibly being part 

7 of an affinity scam, the financial institution shall— 

8 (A) not process the transaction; and 

9 (B) initiate an investigation in order to de10 termine if such transaction is part of an affinity 

11 scam or is legitimate. 

12 (2) INVESTIGATION.—With respect to a trans13 action that is the basis of an investigation described 

14 under paragraph (1)(B), a financial institution 

15 shall— 

16 (A) notify the senior whose account the 

17 transaction would debit, if processed, that the 

18 financial institution— 

19 (i) has identified the transaction as 

20 possibly being part of an affinity scam; 

21 and 

22 (ii) has not yet processed the trans23 action, pending the result of an investiga24 tion; 


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1 (B) if the financial institution determines 

2 that the transaction is part of an affinity 

3 scam— 

4 (i) notify the senior of such deter5 mination; 

6 (ii) refer such transaction to the ap7 propriate law enforcement agency; and 

8 (iii) report such transaction to the 

9 Bureau of Consumer Financial Protection; 

10 and 

11 (C) if the financial institution does not de12 termine that the transaction is part of an affin13 ity scam— 

14 (i) notify the senior of such deter15 mination; and 

16 (ii) process such transaction not later 

17 than 7 business days from the date on 

18 which the investigation was started, unless 

19 instructed otherwise by the senior. 

20 (3) DESIGNATION OF STAFF PERSON.—Each fi21 nancial institution shall designate a single staff per22 son who shall be notified whenever a staff person 

23 identifies a transaction that is possibly part of an af24 finity scam. 


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1 (4) LIABILITY.—A financial institution that 

2 fails to process a transaction or that refers a trans3 action to law enforcement pursuant to the require4 ments of this subsection shall not be liable to any 

5 person under any law or regulation of the United 

6 States, any constitution, law, or regulation of any 

7 State or political subdivision of any State, or under 

8 any contract or other legally enforceable agreement 

9 (including any arbitration agreement), for such fail10 ure or referral. 

11 (c) RULEMAKING.—The Secretary of the Treasury 

12 shall issue such regulations as are necessary to carry out 

13 this section. 

14 (d) TAX DEDUCTION.— 

15 (1) IN GENERAL.—The Secretary of the Treas16 ury shall by regulation establish a deduction to be 

17 allowed in computing the taxable income of financial 

18 institutions for purposes of the Internal Revenue 

19 Code of 1986. 

20 (2) AMOUNT OF DEDUCTION.—Such deduction 

21 with respect to any financial institution for a taxable 

22 year shall be an amount equal to 0.77 percent of the 

23 average of the amount of deposits held by such fi24 nancial institution in senior protection accounts for 

25 each day during such taxable year. 


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1 (e) CIVIL LIABILITY.—Any financial institution that 

2 fails to comply with any provision of this section with re3 spect to a senior shall be liable to such senior in an 

4 amount equal to the sum of the following: 

5 (1) ACTUAL DAMAGES.—The amount of any ac6 tual damage sustained by the senior as a result of 

7 such failure. 

8 (2) ATTORNEYS’ FEES.—In the case of any suc9 cessful action to enforce any liability under para10 graph (1), the costs of the action, together with rea11 sonable attorneys’ fees. 

12 (f) NONDISCRIMINATION.—A financial institution 

13 may not discriminate against seniors in any fees or other 

14 charges required by the financial institution in order to 

15 cover the cost to the financial institution of implementing 

16 the requirements of this Act. 

17 SEC. 6. ADDING AFFINITY SCAMS TARGETING SENIORS TO 

18 THE SUSPICIOUS TRANSACTION REPORTING 

19 REQUIREMENT. 

20 Section 5318(g)(1) of title 31, United States Code, 

21 is amended— 

22 (1) by striking ‘‘The Secretary’’ and inserting 

23 the following: 

24 ‘‘(A) POSSIBLE VIOLATION OF LAW OR

25 REGULATION.—The Secretary’’; and 


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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(B) POSSIBLE AFFINITY SCAM TAR4 GETING SENIORS.— 

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall require each financial institution, and 

7 each director, officer, employee, or agent of 

8 such financial institution, to report any 

9 suspicious transaction relevant to a pos10 sible affinity scam. 

11 ‘‘(ii) DEFINITIONS.—For purposes of 

12 this subparagraph: 

13 ‘‘(I) AFFINITY SCAM.—The term 

14 ‘affinity scam’ means a transaction in 

15 which a person trusted by a senior, 

16 such as a caregiver, relative, guardian, 

17 ‘new friend’, or service provider, 

18 claims to share similar interests or 

19 values with the senior, establishes a 

20 relationship with the senior (either on 

21 the person’s own initiative or through 

22 some other method, such as a court23 appointed guardianship), and then 

24 uses the relationship to defraud the 

25 senior. 


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1 ‘‘(II) SENIOR.—The term ‘senior’ 

2 means an individual who is at least 65 

3 years of age.’’. 

4 SEC. 7. EFFECTIVE DATE. 

5 This Act, and the amendments made by this Act, 

6 shall take effect after the end of the 6-month period begin7 ning on the date of the enactment of this Act. 

Æ 


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