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Senate committee backs uniform special deposits act to protect contingent bank funds
Summary
Senators favorably recommended Senate Bill 294, adopting the Uniform Special Deposits Act as an opt-in framework that clarifies treatment of deposits whose ownership is contingent on future events.
The Senate Business and Labor Standing Committee on Feb. 26 voted to favorably recommend Senate Bill 294, which adopts the Uniform Special Deposits Act to clarify the treatment of bank deposits held for payees whose entitlement depends on a contingency.
Senator McKell, the sponsor, said the measure comes from the Uniform Law Commission and is an opt-in statute that prevents special deposits from being swept into bankruptcy estates, protects deposits from premature creditor process and clarifies deposit-setoff rights. He described the act as drafted with a minimalist anti-fraud philosophy and said he had encountered no opposition.
Howard Headley, president of the Utah Bankers Association, told the committee bankers supported the bill and thanked the sponsor for pursuing uniform law updates. The committee voted unanimously to advance the bill.
