Changes to Existing Law

26.903.21 26.903.22 101st Legislative Session 1238 2026 South Dakota Legislature House Bill 1238 Introduced by: Representative Heermann Underscores indicate new language. Overstrikes indicate deleted language. ENROLLED AN ACT ENTITLED An Act to protect financial institutions taking action to prevent the financial 1 exploitation of consenting, senior, or vulnerable adults. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 4 Terms used in this chapter mean: 5 (1) "Account," a contract for the deposit of funds between the depositor and a financial 6 institution, provided: 7 (a) The account is owned by a consenting, senior, or vulnerable adult, whether 8 individually or with one or more other individuals; or 9 (b) A consenting, senior, or vulnerable adult is a beneficiary of the account; 10 (2) "Consenting adult," any account holder who consents, in writing, to the financial 11 institution and its employees responding to any reasonable concern regarding 12 financial exploitation; 13 (3) "Financial exploitation," the wrongful or unauthorized taking, withholding, 14 appropriation, or use of money, assets, or other property, or the identifying 15 information of a consenting, senior, or vulnerable adult, by any individual or an act 16 or omission by an individual, including through the use of a power of attorney on 17 behalf of, or as the conservator or guardian of, a consenting, senior, or vulnerable 18 adult, to: 19 (a) Obtain control, through deception, intimidation, fraud, or undue influence 20 over the consenting, senior, or vulnerable adult's money, assets, or other 21 property, to deprive the consenting, senior, or vulnerable adult of the 22 ownership, use, benefit, or possession of the property; or 23 (b) Convert the money, assets, or other property of a consenting, senior, or 24 vulnerable adult to deprive the adult of the ownership, use, benefit, or 25 possession of the property; 26 26.903.21 26.903.22 2 1238 Underscores indicate new language. Overstrikes indicate deleted language. HB1238 ENROLLED (4) "Financial institution," a bank, savings bank, building and loan association, savings 1 and loan association, or credit union; any other similar organization that is covered 2 by federal deposit insurance; a subsidiary or affiliate of any entity listed in this 3 subdivision; or a trust company; 4 (5) "Senior adult," an individual age sixty-five or older; 5 (6) "Transaction," any of the following as applicable to services provided by a financial 6 institution: 7 (a) A transfer or request to transfer or disburse funds or assets in an account; 8 (b) A request to initiate a wire transfer, initiate an automated clearinghouse 9 transfer, or issue a money order, cashier's check, or official check; 10 (c) A request to negotiate a check or other negotiable instrument; 11 (d) A request to change the ownership of, or access to, an account; 12 (e) A request for a loan, guarantee of a loan, extension of credit, or draw on a 13 line of credit; 14 (f) A request to encumber any movable or immovable property, including real 15 property, personal property, or fixtures; and 16 (g) A request to designate or change the designation of beneficiaries to receive 17 any property, benefit, or contract right for a consenting, senior, or 18 vulnerable adult at death; and 19 (7) "Vulnerable adult," an individual age eighteen or older who has a substantial 20 mental or functional impairment or for whom a guardian or conservator has been 21 appointed. 22 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 23 If a financial institution, or an employee of a financial institution, reasonably 24 believes, or has received information from a state agency or a law enforcement agency 25 demonstrating that it is reasonable to believe financial exploitation of a consenting, senior, 26 or vulnerable adult may have occurred, may have been attempted, is occurring, or is being 27 attempted, the financial institution may: 28 (1) Delay or refuse a transaction with or involving the consenting, senior, or vulnerable 29 adult; 30 (2) Delay or refuse to permit the withdrawal or disbursement of funds contained in the 31 account of the consenting, senior, or vulnerable adult; 32 (3) Prevent a change in ownership of the account of a consenting, senior, or vulnerable 33 adult; 34 26.903.21 26.903.22 3 1238 Underscores indicate new language. Overstrikes indicate deleted language. HB1238 ENROLLED (4) Prevent a transfer of funds from the account of the consenting, senior, or 1 vulnerable adult to an account owned wholly or partially by another person; 2 (5) Refuse to comply with instructions given to the financial institution by an agent or 3 a person acting for or with an agent under a power of attorney signed or purported 4 to have been signed by the consenting, senior, or vulnerable adult; or 5 (6) Prevent the designation or change the designation of beneficiaries to receive any 6 property, benefit, or contract rights for a consenting, senior, or vulnerable adult at 7 death. 8 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 9 Neither a financial institution, nor an employee of the institution is required to act 10 under section 2 of this Act when provided with information alleging that financial 11 exploitation may have occurred, may have been attempted, is occurring, or is being 12 attempted, but may use discretion to determine whether or not to act, based on the 13 information available to the institution or the employee at the time. 14 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 15 A financial institution or an employee of a financial institution may notify any third 16 party reasonably associated with a consenting, senior, or vulnerable adult, if the institution 17 or employee reasonably believes that financial exploitation of the adult may have 18 occurred, may have been attempted, is occurring, or is being attempted. 19 A financial institution or an employee of a financial institution may choose not to 20 notify any third party reasonably associated with a consenting, senior, or vulnerable adult 21 of suspected financial exploitation of the adult, if the institution or employee reasonably 22 believes the third party is, may be, or may have been engaged in the financial exploitation 23 of the adult, or if requested to refrain from making a notification by a law enforcement 24 agency on the grounds that the notification could interfere with a law enforcement 25 investigation. 26 For purposes of this section, a third party reasonably associated with a consenting, 27 senior, or vulnerable adult means: 28 (1) A parent, spouse, adult child, sibling, or other known family member or close 29 associate of the adult; 30 (2) An authorized contact provided by the adult to the financial institution; 31 (3) A co-owner, additional authorized signatory, or beneficiary on an adult's account; 32 26.903.21 26.903.22 4 1238 Underscores indicate new language. Overstrikes indicate deleted language. HB1238 ENROLLED (4) An attorney in fact, trustee, conservator, guardian, or other fiduciary who has been 1 selected by the adult, a court, or a third party, to manage some or all of the 2 financial affairs of the adult; and 3 (5) An attorney known to represent or have represented the adult. 4 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 5 Except as otherwise provided in this section, the authority granted the financial 6 institution under section 2 of this Act expires upon the earliest of: 7 (1) Thirty business days after the date on which the financial institution first acted 8 under section 2; 9 (2) When the financial institution is satisfied that the transaction or act will not result 10 in financial exploitation of the consenting, senior, or vulnerable adult; or 11 (3) Termination by an order of a court of competent jurisdiction. 12 Unless otherwise directed by order of a court, a financial institution may extend 13 the duration of authority under this section based on a reasonable belief that the financial 14 exploitation of a consenting, senior, or vulnerable adult may continue to occur or continue 15 to be attempted. 16 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 17 A financial institution and its bank holding company, if any, and any employees, 18 agents, officers, and directors of the financial institution and its bank holding company, if 19 any, are immune from any civil, criminal, or administrative liability that may otherwise 20 exist: 21 (1) For delaying or refusing to execute a transaction, withdrawal, or disbursement, in 22 accordance with this chapter; 23 (2) For not delaying or refusing to execute a transaction, withdrawal, or disbursement 24 in accordance with this chapter; and 25 (3) For actions taken in furtherance of determinations made in accordance with this 26 chapter. 27 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 51A: 28 Notwithstanding any other law, the refusal by a financial institution to engage in a 29 transaction in accordance with this chapter does not constitute the wrongful dishonor of 30 an item under § 57A-4-402. 31 26.903.22 5 1238 HB1238 ENROLLED 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