Committee backs bill allowing modern real-time payment systems as "good funds" for closings

The House Finance Committee voted 13-0 to advance Senate Bill 16, a bill that updates Colorado's definition of "good funds" for real estate closings to include modern real-time or instant payment systems such as Federal Reserve-operated services.

Representative Basenecker, the sponsor on the House side, told the committee the bill "keeps all existing forms of good funds and adds the use of modern payment systems, including real time or instant payments while providing strong protections for consumers and regulated escrow agents." The bill specifically references federal real-time gross settlement systems (for example, Fedwire) and the Clearing House's services that were launched or updated in 2023.

Supporters from the Land Title Association of Colorado and the Colorado Bankers Association told the committee the change brings statutory language in line with newly available payment infrastructure and could reduce wire fraud and settlement delays. Brian Phillips of the Land Title Association said the change would allow title companies and lenders to rely on new technologies as they are adopted by banks. Allison Morgan of the Colorado Bankers Association said the group supported the technical House amendment the sponsors proposed.

Sponsors moved a technical amendment (L005) clarifying language missed in the Senate; the committee adopted it and then voted to send the bill to the Committee of the Whole with a favorable recommendation. The committee roll call recorded the vote as 13 to 0.

Committee members asked for examples of covered payment systems; sponsors and witnesses identified Fedwire and real-time gross-settlement services and noted the bill is written to accommodate additional systems as they are developed.

Senate Bill 16 as amended moves forward to the Committee of the Whole.