NY A05345

Establishes the Uniform Special Deposits Act in New York banking law, creating a standardized legal framework for special deposits held by banks for specific purposes such as escrow funds, security deposits, settlement of payment system obligations, and financial market collateral

Defines special deposits as requiring at least two beneficiaries, a permissible governmental/regulatory/commercial/charitable/testamentary purpose stated in the account agreement, and a contingency that must occur before payment is triggered

Provides that neither depositors nor beneficiaries have a direct property interest in the special deposit itself, only in the right to receive payment once the bank becomes obligated to pay, protecting funds from general creditor claims until payment obligations arise

Prohibits banks from exercising recoupment or set off against special deposits except for specific purposes like discharging payment obligations, overdraft fees, direct costs, or reversing erroneous credits

Limits bank liability to direct damages proximately caused by noncompliance with the account agreement, excluding consequential, special, or punitive damages, and specifies that banks have no fiduciary duty with respect to special deposits