wa-law.org > bill > 2025-26 > HB 1900 > Original Bill
Pending an investigation by the financial institution, the department, or law enforcement, if a financial institution reasonably believes that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted, the financial institution shall immediately notify the department and the department of financial institutions, comply with subsection (8) of this section, and may, but is not required to, refuse a transaction requiring disbursal of funds contained in the account:
Of the vulnerable adult;
On which the vulnerable adult is a beneficiary, including a trust or guardianship account; or
Of a person suspected of perpetrating financial exploitation of a vulnerable adult.
A financial institution may also refuse to disburse funds under this section if the department, law enforcement, or the prosecuting attorney's office provides information to the financial institution demonstrating that it is reasonable to believe that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted.
A financial institution is not required to refuse to disburse funds when provided with information alleging that financial exploitation may have occurred, may have been attempted, or is being attempted, but may use its discretion to determine whether or not to refuse to disburse funds based on the information available to the financial institution.
A financial institution that refuses to disburse funds based on a reasonable belief that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted shall:
Make a reasonable effort to notify all parties authorized to transact business on the account orally or in writing; and
Report the incident to the adult protective services division of the department and local law enforcement.
Any refusal to disburse funds as authorized by this section based on the reasonable belief of a financial institution that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted will expire upon the sooner of:
Ten business days after the date on which the financial institution first refused to disburse the funds if the transaction involved the sale of a security or offer to sell a security, as defined in RCW 21.20.005, unless sooner terminated by an order of a court of competent jurisdiction;
Five business days after the date on which the financial institution first refused to disburse the funds if the transaction did not involve the sale of a security or offer to sell a security, as defined in RCW 21.20.005, unless sooner terminated by an order of a court of competent jurisdiction; or
The time when the financial institution is satisfied that the disbursement will not result in financial exploitation of a vulnerable adult.
A court of competent jurisdiction may enter an order extending the refusal by the financial institution to disburse funds based on a reasonable belief that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted. A court of competent jurisdiction may also order other protective relief as authorized by RCW 7.40.010 and 7.105.310.
A financial institution or an employee of a financial institution is immune from criminal, civil, and administrative liability for refusing to disburse funds or disbursing funds under this section and for actions taken in furtherance of that determination if the determination of whether or not to disburse funds was made in good faith.
A financial institution that notifies the department and the department of financial institutions as provided in subsection (1) of this section shall place an internal flag on the account of the vulnerable adult to notify employees of the financial institution with access to the account that:
Financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted;
The department and the department of financial institutions have been notified; and
Washington law authorizes a financial institution to refuse a transaction requiring disbursal of funds when financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted.
Nothing contained in this chapter shall be deemed to require any financial institution to make any payment from an account to a depositor, or any trust or P.O.D. account beneficiary, or any other person claiming an interest in any funds deposited in the account, if the financial institution has actual knowledge of the existence of a dispute between the depositors, beneficiaries, or other persons concerning their respective rights of ownerships to the funds contained in, or proposed to be withdrawn, or previously withdrawn from the account, or in the event the financial institution is otherwise uncertain as to who is entitled to the funds pursuant to the contract of deposit. In any such case, the financial institution may, without liability, notify, in writing, all depositors, beneficiaries, or other persons claiming an interest in the account of either its uncertainty as to who is entitled to the distributions or the existence of any dispute, and may also, without liability, refuse to disburse any funds contained in the account to any depositor, and/or trust or P.O.D. account beneficiary thereof, and/or other persons claiming an interest therein, until such time as either:
All such depositors and/or beneficiaries have consented, in writing, to the requested payment; or
The payment is authorized or directed by a court of proper jurisdiction.
If a financial institution reasonably believes that financial exploitation of a vulnerable adult, as defined in RCW 74.34.020, may have occurred, may have been attempted, or is being attempted, the financial institution may refuse a transaction as permitted under RCW 74.34.215.
If a financial institution reasonably believes that financial fraud of an individual in relation to funds in an account may have occurred, may have been attempted, or is being attempted, the financial institution shall immediately notify the department of financial institutions. This subsection may apply, but is not limited to, circumstances when the real owner of an account seeks to engage or engages in a withdrawal or other transaction or series of transactions that are substantially different in nature than withdrawals or transactions in the account's history.
Financial institutions with accounts of individual account owners in this state shall have policies and procedures to allow employees to place an internal flag on an account to notify other employees of the financial institution who have access to the individual's account that an interaction or a transaction with an individual account owner, or someone presenting themselves as the individual account owner, caused a reasonable belief that financial fraud of the individual account owner may have occurred, may have been attempted, or is being attempted. This subsection may apply, but is not limited to, circumstances when the real owner of an account seeks to engage or engages in a withdrawal or other transaction or series of transactions that are substantially different in nature than withdrawals or transactions in the account's history.
The placement of an internal flag on an account pursuant to this section is for purposes of internal use by the financial institution only and does not require a financial institution to withhold funds or refuse to engage in a transaction, or create any legal liability on the part of an employee acting in good faith placing an internal flag on an account.
The purposes of this chapter are:
To provide a consistent law applicable to all financial institutions authorized to accept deposits from individuals with respect to payments by the institutions to individuals claiming rights to the deposited funds; and
To qualify and simplify the law concerning the respective ownership interests of individuals to funds held on deposit by financial institutions, both as to the relationship between the individual depositors and beneficiaries of an account, and to the financial institution-depositor-beneficiary relationships;
To simplify and make consistent the law pertaining to payments by financial institutions of deposited funds both before and after the death of a depositor or depositors, including provisions for the validity and effect of certain nontestamentary transfers of deposits upon the death of one or more depositors; and
To assist in preventing fraud of an individual account owner related to the individual's funds in an account.
If a broker-dealer, investment adviser, or investment adviser representative reasonably believes that financial fraud of an individual in relation to securities or funds in an account may have occurred, may have been attempted, or is being attempted, the broker-dealer, investment adviser, or investment adviser representative shall immediately notify the department of financial institutions.
Broker-dealers, investment advisers, and investment adviser representatives shall have policies and procedures to allow the placement of an internal flag on an account to notify other employees in the organization that an interaction or a transaction with a client, or someone presenting themselves as a client caused a reasonable belief that financial fraud of the client may have occurred, may have been attempted, or is being attempted.
This section may apply, but is not limited to, circumstances when the real owner of an account seeks to engage or engages in a sale of a security or withdrawal of funds that are substantially different in nature than transactions or withdrawals in the account's history.
The placement of an internal flag on an account pursuant to this section is for purposes of internal use by the organization of the broker-dealer, investment adviser, and investment adviser representative only and does not require the withholding of funds or refusal to engage in a transaction or create any legal liability on the part of an individual broker-dealer, investment adviser, investment adviser representative, or employee, while acting in good faith.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.