text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Preventing Affinity Scams for 
  Seniors Act of 2010'' or the ``PASS Act of 2010''.
  
  SEC. 2. FINDINGS.
  
      The Congress finds the following:
              (1) Financial exploitation of the elderly is becoming an 
          increasingly familiar problem. Regular review of news headlines 
          reveals that elders and vulnerable adults are victimized 
          routinely by frauds and scams at the hands of strangers as well 
          as loved ones.
              (2) Older individuals may be targeted merely because they 
          possess more assets, such as savings, annuities, and retirement 
          accounts, stocks and bonds, insurance policies, and property 
          than younger people. People over 50 years of age control at 
          least 70 percent of the net worth of the nation's households.
              (3) Those elders with cognitive impairments, mental health 
          conditions, or physical disabilities may be dependent upon 
          others (family members, friends, formal and informal 
          caregivers, or court-appointed representatives) for assistance 
          in making financial decisions or carrying out daily 
          transactions, and therefore may be even more vulnerable to 
          theft, exploitation, or undue influence.
              (4) Affinity scams on seniors involve transactions in which 
          a person trusted by the senior uses the relationship to defraud 
          the senior. Millions of elderly are scammed each year, losing 
          at least 2,600,000,000 a year to thieves, many of whom are in 
          their own families (conservative estimate given of the schemes 
          left unreported).
              (5) Elder financial abuse is commonly linked with other 
          forms of abuse and neglect and threatens the health, dignity, 
          and economic security of millions of older Americans. Elder 
          financial abuse has received limited attention because it is 
          not regarded as visible, life-threatening, or newsworthy as is 
          the physical or sexual abuse of elders.
              (6) Financial exploitation can be devastating to the victim 
          and is often traced to family members, trusted friends, or 
          caregivers. Financial abuse often occurs with the implied 
          acknowledgment and consent of the elder person and can be more 
          difficult to detect.
              (7) Elder financial abuse affects elders and their families 
          in significant and long-lasting ways by putting enormous 
          emotional duress on the elders, increasing their risk of 
          depression, decreasing their quality of life, and increasing 
          unnecessary institutionalization.
              (8) The financial services industry is often the first to 
          detect a change in the pattern of customers with whom they have 
          regular contact. This puts institutions in a unique position to 
          assist in protecting customers and upholding the inherent trust 
          relationship with clients.
  
  SEC. 3. DEFINITIONS.
  
      For purposes of this Act:
              (1) Affinity scam.--The term ``affinity scam'' means a 
          transaction in which a person trusted by a senior, such as a 
          caregiver, relative, guardian, ``new friend'', or service 
          provider, claims to share similar interests or values with the 
          senior, establishes a relationship with the senior (either on 
          the person's own initiative or through some other method, such 
          as a court-appointed guardianship), and then uses the 
          relationship to defraud the senior.
              (2) Financial institution.--The term ``financial 
          institution'' means--
                      (A) an insured bank (as defined in section 3(h) of 
                  the Federal Deposit Insurance Act (12 U.S.C. 1813(h));
                      (B) a credit union; and
                      (C) a thrift institution.
              (3) Senior.--The term ``senior'' means an individual who is 
          at least 65 years of age.
  
  SEC. 4. AFFINITY SCAM EDUCATION AND TRAINING.
  
      (a) Staff Education and Training.--Each financial institution 
  shall--
              (1) educate the staff of the financial institution about 
          affinity scams and how to identify transactions that may be 
          part of an affinity scam; and
              (2) train staff members on educating seniors about affinity 
          scams.
      (b) Senior Customer Education.--Each financial institution shall 
  provide educational materials and other information to seniors who 
  maintain a deposit account with the financial institution about 
  affinity scams and how to identify transactions that may be part of an 
  affinity scam.
      (c) Education and Training Oversight.--The Bureau of Consumer 
  Financial Protection shall--
              (1) issue such regulations as are necessary to carry out 
          this section; and
              (2) periodically audit financial institutions to ensure 
          compliance with such regulations.
  
  SEC. 5. SENIOR PROTECTION ACCOUNTS.
  
      (a) In General.--Each financial institution shall offers seniors a 
  type of checking account to be known as a ``senior protection 
  account''.
      (b) Senior Protection Account Requirements.--
              (1) In general.--With respect to a senior who maintains a 
          senior protection account with a financial institution, if the 
          financial institution receives a transaction request to debit 
          such account and, before processing the transaction, the 
          financial institution identifies the transaction as possibly 
          being part of an affinity scam, the financial institution 
          shall--
                      (A) not process the transaction; and
                      (B) initiate an investigation in order to determine 
                  if such transaction is part of an affinity scam or is 
                  legitimate.
              (2) Investigation.--With respect to a transaction that is 
          the basis of an investigation described under paragraph (1)(B), 
          a financial institution shall--
                      (A) notify the senior whose account the transaction 
                  would debit, if processed, that the financial 
                  institution--
                              (i) has identified the transaction as 
                          possibly being part of an affinity scam; and
                              (ii) has not yet processed the transaction, 
                          pending the result of an investigation;
                      (B) if the financial institution determines that 
                  the transaction is part of an affinity scam--
                              (i) notify the senior of such 
                          determination;
                              (ii) refer such transaction to the 
                          appropriate law enforcement agency; and
                              (iii) report such transaction to the Bureau 
                          of Consumer Financial Protection; and
                      (C) if the financial institution does not determine 
                  that the transaction is part of an affinity scam--
                              (i) notify the senior of such 
                          determination; and
                              (ii) process such transaction not later 
                          than 7 business days from the date on which the 
                          investigation was started, unless instructed 
                          otherwise by the senior.
              (3) Designation of staff person.--Each financial 
          institution shall designate a single staff person who shall be 
          notified whenever a staff person identifies a transaction that 
          is possibly part of an affinity scam.
              (4) Liability.--A financial institution that fails to 
          process a transaction or that refers a transaction to law 
          enforcement pursuant to the requirements of this subsection 
          shall not be liable to any person under any law or regulation 
          of the United States, any constitution, law, or regulation of 
          any State or political subdivision of any State, or under any 
          contract or other legally enforceable agreement (including any 
          arbitration agreement), for such failure or referral.
      (c) Rulemaking.--The Secretary of the Treasury shall issue such 
  regulations as are necessary to carry out this section.
      (d) Tax Deduction.--
              (1) In general.--The Secretary of the Treasury shall by 
          regulation establish a deduction to be allowed in computing the 
          taxable income of financial institutions for purposes of the 
          Internal Revenue Code of 1986.
              (2) Amount of deduction.--Such deduction with respect to 
          any financial institution for a taxable year shall be an amount 
          equal to 0.77 percent of the average of the amount of deposits 
          held by such financial institution in senior protection 
          accounts for each day during such taxable year.
      (e) Civil Liability.--Any financial institution that fails to 
  comply with any provision of this section with respect to a senior 
  shall be liable to such senior in an amount equal to the sum of the 
  following:
              (1) Actual damages.--The amount of any actual damage 
          sustained by the senior as a result of such failure.
              (2) Attorneys' fees.--In the case of any successful action 
          to enforce any liability under paragraph (1), the costs of the 
          action, together with reasonable attorneys' fees.
      (f) Nondiscrimination.--A financial institution may not 
  discriminate against seniors in any fees or other charges required by 
  the financial institution in order to cover the cost to the financial 
  institution of implementing the requirements of this Act.
  
  SEC. 6. ADDING AFFINITY SCAMS TARGETING SENIORS TO THE SUSPICIOUS 
                TRANSACTION REPORTING REQUIREMENT.
  
      Section 5318(g)(1) of title 31, United States Code, is amended--
              (1) by striking ``The Secretary'' and inserting the 
          following:
                      ``(A) Possible violation of law or regulation.--The 
                  Secretary''; and
              (2) by adding at the end the following new subparagraph:
                      ``(B) Possible affinity scam targeting seniors.--
                              ``(i) In general.--The Secretary shall 
                          require each financial institution, and each 
                          director, officer, employee, or agent of such 
                          financial institution, to report any suspicious 
                          transaction relevant to a possible affinity 
                          scam.
                              ``(ii) Definitions.--For purposes of this 
                          subparagraph:
                                      ``(I) Affinity scam.--The term 
                                  `affinity scam' means a transaction in 
                                  which a person trusted by a senior, 
                                  such as a caregiver, relative, 
                                  guardian, `new friend', or service 
                                  provider, claims to share similar 
                                  interests or values with the senior, 
                                  establishes a relationship with the 
                                  senior (either on the person's own 
                                  initiative or through some other 
                                  method, such as a court-appointed 
                                  guardianship), and then uses the 
                                  relationship to defraud the senior.
                                      ``(II) Senior.--The term `senior' 
                                  means an individual who is at least 65 
                                  years of age.''.
  
  SEC. 7. EFFECTIVE DATE.
  
      This Act, and the amendments made by this Act, shall take effect 
  after the end of the 6-month period beginning on the date of the 
  enactment of this Act.
target: Preventing Affinity Scams for Seniors Act of 2010 or PASS Act of 2010 - Defines "affinity scam" as a transaction in which a person trusted by a senior, such as a caregiver, relative, guardian, "new friend," or service provider, claims to share similar interests or values and establishes a relationship with the senior, then uses the relationship to defraud the senior.
  
  Requires each financial institution to: (1) educate its staff about affinity scams and how to identify transactions that may be part of an affinity scam; (2) train staff members on educating seniors about affinity scams; (3) provide senior depositors with educational materials on how to identify affinity scams; and (4) offer seniors a "senior protection (checking) account."
  
  Directs the Bureau of Consumer Financial Protection to: (1) issue implementing regulations; and (2) audit financial institutions periodically to ensure compliance with them.
  
  Sets forth senior protection account requirements, including protective measures to block and investigate transactions suspected of being an affinity scam.
  
  Instructs the Secretary of the Treasury to establish an income tax deduction of .77% of the average of the amount of deposits held by a financial institution in senior protection accounts.
  
  Subjects a noncompliant financial institution to a civil liability with respect to a senior who has sustained actual damage as a result of the institution's failure to comply with this Act.
  
  Directs the Secretary to require each financial institution, and each of its directors, officers, employees, or agents, to report any suspicious transaction relevant to a possible affinity scam.
feat_title: To require financial institutions to offer services to protect seniors from affinity scams, to report suspected affinity scams, and for other purposes.