Vol. XLIII, No. 13

Vol. XLIII, No. 13

Elder Abuse/Transaction Hold Law

I. Introduction
The Nebraska Legislature passed LB 909 in 2020 to create additional protections for vulnerable adults and senior adults. In 2026, the Nebraska Legislature passed LB 838, which provided additional protections for vulnerable adults and senior adults by allowing them to designate an "authorized contact" on account documentation. The legislation is codified at Neb.Rev.Stat. §§8-2901 to 8-2903. The new provisions related to authorized contacts went into effect July 18, 2026.

Legislative findings within the new law provide:

• ​It is the intent of the Legislature to provide legal protection to financial institutions so that they have the discretion to take action to assist in detecting and preventing financial exploitation;
• The Legislature recognizes that financial institutions are in a unique position to potentially discover financial exploitation when conducting transactions on behalf of and at the request of their customers;
• The Legislature recognizes that financial institutions have duties imposed by contract and duties imposed by both federal and state law to conduct transactions requested by their customers faithfully and timely in accordance with the customer's instructions; and
• The Legislature recognizes that financial institutions do not have a duty to contravene the valid instructions of their customers and nothing in Neb.Rev.Stat. §§ 8-2901 to 8-2903 creates such a duty.

II. Key Definitions
A. Account
A contract of deposit of funds between the depositor and a financial institution and:

1. The account is owned by a vulnerable adult or senior adult, whether individually or with one or more other persons; or
2. A vulnerable adult or senior adult is a beneficiary of the account, including a formal or informal trust account, a payable on death account, a conservatorship account, or a guardianship account.

B. Authorized Contact
An adult person designated by a vulnerable adult or senior adult to be contacted by a financial institution in the event of an emergency, a loss of contact with the customer, or suspected financial exploitation.

C. Financial Exploitation

1. The wrongful or unauthorized taking, withholding, appropriation, or use of the money, assets, or other property or the identifying information of a vulnerable adult or senior adult by any person; or
2. An act or omission by a person, including through the use of a power of attorney on behalf of, or as the conservator or guardian of, a vulnerable adult or senior adult, to:

• Obtain control, through deception, intimidation, fraud, or undue influence, over the vulnerable adult's or senior adult's money, assets, or other property to deprive the vulnerable adult or senior adult of the ownership, use, benefit, or possession of the property; or
• Convert the money, assets, or other property of a vulnerable adult or senior adult to deprive a vulnerable adult or senior adult of the ownership, use, benefit, or possession of the property.

D. Financial Institution
A bank, savings bank, building and loan association, savings and loan association, or credit union, whether chartered by the Department of Banking and Finance, the United States, or a foreign state agency; any other similar organization which is covered by federal deposit insurance; a subsidiary or affiliate of any such entity; or a trust company as defined in Neb.Rev.Stat. §8-230.

E. Senior Adult
"[A]ny person 65 years of age or older." Neb.Rev.Stat. §28-361.06

F. Transaction
Any of the following as applicable to services provided by a financial institution:

• A transfer or request to transfer or disburse funds or assets in an account;
• A request to initiate a wire transfer, initiate an automated clearing house transaction, or issue a money order, cashier's check or an official check;
• A request to change the ownership of, or access to, an account;
• A request for a loan, guarantee of a loan, extension of credit, or draw on a line of credit;
• A request to encumber any moveable or immoveable property, including real property, personal property, or fixtures; and
• A request to designate or change the designation of beneficiaries to receive any property, benefit, or contract right for a vulnerable adult or senior adult at death.

G. Vulnerable Adult
"[A]ny person 18 years of age or older who has a substantial mental or functional impairment or for whom a guardian or conservator has been appointed under the Nebraska Probate Code." Neb.Rev.Stat. §28-371

1. ​Substantial functional impairment: A substantial incapability, because of physical limitations, of living independently or providing self-care as determined through observation, diagnosis, investigation, or evaluation. Neb.Rev.Stat. §28-368
2. Substantial mental impairment: A substantial disorder of thought, mood, perception, orientation, or memory that grossly impairs judgment, behavior, or ability to live independently or provide self-care as revealed by observation, diagnosis, investigation, or evaluation. Neb.Rev.Stat. §28-369

III. Permissible Financial Institution Actions
When a financial institution, or an employee of a financial institution, reasonably believes, or has received information from the Department of Health and Human Services or a law enforcement agency demonstrating that it is reasonable to believe, that financial exploitation of a vulnerable adult or senior adult may have occurred, may have been attempted, is occurring, or is being attempted, the financial institution may, but is not required to, act, delay, or refuse to execute a transaction, withdrawal or disbursement.

A. Transaction Hold - Delay or Refuse to Execute a Transaction, Withdrawal, or Disbursement
A financial institution may:

1. Delay or refuse a transaction with or involving the vulnerable adult or senior adult;
2. Delay or refuse to permit the withdrawal or disbursement of funds contained in the vulnerable adult's or senior adult's account;
3. Prevent a change in ownership of the vulnerable adult's or senior adult's account;
4. Prevent a transfer of funds from the vulnerable adult's or senior adult's account 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 vulnerable adult or senior adult;
6. Prevent the designation or change the designation of beneficiaries to receive any property, benefit, or contract rights for a vulnerable adult or senior adult at death; or
7. Notify a third party as set forth below.

B. Transaction Hold Timeframe
The decision to delay or refuse expires upon the sooner of:

1. Thirty business days after the date on which the financial institution first acted under Neb.Rev.Stat. §8-2903(1);
2. When the financial institution is satisfied that the transaction or act will not result in financial exploitation of the vulnerable adult or senior adult; or
3. Upon termination by an order of a court of competent jurisdiction.

However, unless otherwise directed by order of a court of competent jurisdiction, a financial institution may extend the duration of the transaction hold based on a reasonable belief that the financial exploitation of a vulnerable adult or senior adult may continue to occur or continue to be attempted.

C. Notification of Third Parties
"A financial institution may notify any third party reasonably associated with a vulnerable adult or senior adult if the financial institution reasonably believes that he financial exploitation of a vulnerable adult or senior adult may have occurred, may have been attempted, is occurring, or is being attempted." Neb.Rev.Stat. § 8-2903 (3)(a)(i)

The following are permissible third parties:
1. A third party reasonably associated with a vulnerable adult or senior adult includes, but is not limited to, the following:

• ​A parent, spouse, adult child, sibling, or other known family member or close associate of a vulnerable adult or senior adult;
• an authorized contact provided by a vulnerable adult or senior adult to the financial institution;
• a co-owner, additional authorized signatory, or beneficiary on a vulnerable adult's or senior adult's account;
• an attorney in fact, trustee, conservator, guardian, or other fiduciary who has been selected by a vulnerable adult or senior adult, a court, or a third party to manage some or all of the financial affairs of the vulnerable adult or senior adult; and
• an attorney known to represent or have represented the vulnerable adult or senior adult.

Importantly, banks may choose not to notify a third party:

​"A financial institution may choose not to notify any third party reasonably associated with a vulnerable adult or senior adult of suspected financial exploitation of the vulnerable adult or senior adult if the financial institution reasonably believes the third party is, may be, or may have been engaged in the financial exploitation of the vulnerable adult or senior adult or if requested to refrain from making a notification by a law enforcement agency, if such notification could interfere with a law enforcement investigation." Neb.Rev.Stat. § 8-2903 (3)(b).

Financial institutions may, but are not required to, notify the Department of Health and Human Services or a law enforcement agency if the financial institution reasonably believes that the financial exploitation of a vulnerable adult or senior adult may have occurred, may have been attempted, is occurring, or is being attempted.

D. Financial Institutions Have Discretion to Act (or Not to Act) with Regard to Transaction Holds, Delays, and Notification of Third Parties
"A financial institution is not required to act under Neb.Rev.Stat. §§ 8-2901 to 8-2903 when provided with information alleging that financial exploitation may have occurred, may have been attempted, is occurring, or is being attempted, but may use the financial institution's discretion to determine whether or not to act based on the information available to the financial institution at the time."

E. Financial Institutions Have Immunity for Actions Taken, or a Decision to Not Act with Regard to Transaction Holds, Delays, and Notification of Third Parties
​"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, shall be immune from any civil, criminal, or administrative liability that may otherwise exist (a) for delaying or refusing to execute a transaction, withdrawal, or disbursement, or for not delaying or refusing to execute such transaction, withdrawal, or disbursement under Neb.Rev.Stat. §8-2903 and (b) for actions taken in furtherance of determinations made under Neb.Rev.Stat. §8-2903(1)-(5)."

F. Financial Institutions Immunity and Protections for Authorized Contact Programs
1. "A financial institution shall be immune from any civil, criminal, or administrative liability that may otherwise exist for choosing not to implement an authorized contact program..." Neb.Rev.Stat. §8-2903 (8)

2. "A financial institution, when acting in a reasonable manner, shall be immune from any civil, criminal, or administrative liability that may otherwise exist for any actions or omissions related to the administration of such a program. A financial institution shall not be liable for the actions of an authorized contact." Neb.Rev.Stat. §8-2903 (8)

3. "A financial institution shall be immune from any civil, criminal, or administrative liability for declining to interact with an authorized contact if the financial institution reasonably believes that:

• (a) The authorized contact is, may be, or may have been engaged in the financial exploitation of the vulnerable adult or senior adult; or
• (b) Such interaction is not in the best interests of the vulnerable adult or senior adult." Neb.Rev.Stat. §8-2903 (9)

IV. Safe Harbor Provisions
A. Wrongful Dishonor
A refusal by a bank to engage in a transaction under Neb.Rev.Stat. §8-2903(1) shall not constitute the wrongful dishonor of an item under Neb.Rev.Stat. §4-402, Uniform Commercial Code.

B. Regulation CC
A reasonable belief that payment of a check will facilitate the financial exploitation of a vulnerable adult or senior adult shall constitute reasonable grounds to doubt the collectability of the item for purposes of the federal Check Clearing for the 21st Century Act, 12 U.S.C. 5001 et seq., the federal Expedited Funds Availability Act, 12 U.S.C. 4001 et seq., and 12 C.F.R. part 229, as such acts and part existed on January 1, 2026.

C. Privacy Concerns
1. Gramm-Leach-Bliley Act (GLBA) Title V and Consumer Financial Protection Bureau (CFPB) Regulation P exceptions to notice and opt out provisions include disclosures:

• To protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability; and
• To comply with federal, state, or local laws, rules, and other applicable legal requirements (Regulation P §1016.15(a)).

V. Conclusion
The law provides financial institutions with a valuable tool to combat financial exploitation of vulnerable adults and senior adults. While not statutorily required, financial institutions should establish a written protocol for the delay or refusal of banking transactions by a vulnerable adult or senior adult and for the notification of third parties reasonably associated with a vulnerable adult or senior adult in cases in which the financial institution reasonably believes that the financial exploitation of a vulnerable adult or senior adult may have occurred, may have been attempted, is occurring, or is being attempted.

Full-Text PDF

---

The foregoing Compliance Update is for informational purposes only and does not constitute legal advice. As a reminder, the NBA general counsel is the attorney for the Nebraska Bankers Association, not its member banks. The general counsel is available to assist members with finding resources to help answer their questions. However, for specific legal advice about specific situations, members must consult and retain their own attorney.