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Panel reviews bill to allow brokers to sweep escrow interest above $1,000
Summary
Representative Voss presented House Bill 1211 to allow real estate brokers to sweep monthly interest earnings from escrow accounts when interest exceeds $1,000; committee members suggested noninterest-bearing accounts as an alternative. No vote was taken.
Representative Voss presented House Bill 1211 to the Committee on Financial Institutions, saying the measure would permit real estate brokers to transfer monthly interest earned on client escrow balances if that interest exceeds $1,000, to avoid being out of compliance with current statutes as the sponsor described them.
Voss said the idea "was presented to me by a friend of mine who is a real estate broker" and that the broker "quite frequently finds that the interest that is earned on that account exceeds a thousand dollars, in a month." The sponsor said the bill would add statutory language to allow the broker to sweep that interest outside the escrow account within 30 days so the broker could remain compliant.
Committee members questioned whether brokers could instead use noninterest-bearing accounts. Chair Owen suggested the broker "can move it into a non interest bearing account and he wouldn't have that issue." A committee member asked whether the interest came from clients' escrowed funds and whether the funds were used for brokerage operations; the sponsor replied that the interest "is" from monies held in escrow and that it is used for the operation of the brokerage.
No witnesses testified in favor or opposition during the hearing, and the committee did not record a vote or an amendment on the bill in the transcript. The hearing record notes that the sponsor and committee discussed compliance options but no final direction, referral, or formal motion was included in the provided transcript.
