SB 308 Summary

• Adopts the Uniform Special Deposits Act, authored by the Uniform Law Commission, to provide legal clarity and certainty for special deposit accounts at banks.

• Establishes comprehensive definitions and requirements for special deposits, including that deposits must serve a permissible purpose (such as escrow, security deposits, or settlement accounts), involve at least 2 beneficiaries, and be subject to a contingency.

• Provides that neither depositors nor beneficiaries have property interest in the special deposit itself, only in the right to receive payment if contingencies are met and the bank becomes obligated to pay.

• Protects special deposits from creditor process and recoupment rights by banks, with limited exceptions, and establishes that special deposits terminate 5 years after first funding unless otherwise stated in the account agreement.

• Effective date is January 1, 2025; applies to account agreements executed on or after that date, and to earlier agreements if all parties consent to make the deposit a special deposit governed by this chapter.