HB 1238

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