02/25/19 -- HCS HB 354 -- Allows brokers or investment advisors to freeze accounts if they suspect fraud
HCS HB 354, introduced by Representative Dean Plocher (Republican - District 89) allows brokers and investment advisors to refuse to process a transaction by a person considered "vulnerable" (as defined by statute) if they suspect that person is the victim of fraud. This is a well intended bill, that aims to protect seniors from those who would prey on them with various scams. The bill would allow the advisor to call a family member of the client and consult with them prior to processing a suspect transaction. While I understand the intent here, this could easily lead to serious real world problems.
Investment transactions are often highly time sensitive, and any delay in processing a legitimate transaction could have a significant impact on someone's finances. A wrongful flagging of a transaction by a well meaning employee could lead to the victimization of the very class of people this bill was intended to protect. Moreover, I have a fundamental problem with the idea of a financial institution substituting their judgement for that of their clients. People aught to have a right to make their own decisions regarding their finances, even if that means some people will naively fall for scams and make bad choices.
While I was not the only one to vote no, this bill still passed by a wide margin.