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Committee backs updates to 'good funds' law to include real‑time payments and clearinghouse wires
Summary
Senate Finance approved SB 25016 with amendment L002 to add electronic clearinghouse wires and language covering real‑time or instant payments to the statutory definition of good funds; the bill moves to the Committee of the Whole for further floor work.
Senate Bill 25016, which clarifies forms of payment that qualify as "good funds" for real‑estate closings and sets procedures for release of escrowed funds, was advanced unanimously by the Senate Finance Committee after adoption of amendment L002.
The bill retains existing definitions for cashier's checks and Federal Reserve wires and expands the statutory language to include the Clearing House Interbank Payments System and to accommodate emerging real‑time or instant payment systems. Brian Phillips of the Land Title Association of Colorado told the committee that the intent is to preserve the existing good‑funds framework while adding secure new payment options that can reduce wire and check fraud. "These are emerging technology payment systems ... they have the ability to really reduce the risk of escrow losses due to wire fraud, and check fraud," Phillips said.
The Colorado Bar Association and the Colorado Bankers Association testified in the amend position and asked for minor language clarifications, particularly about whether mere receipt of a real‑time payment should be sufficient to treat it as good funds or whether confirmation steps should be required. Eric Snyder, testifying for the Bar Association, said the ALTA model and some industry practices treat receipt of real‑time or instant payments as sufficient; he and the bankers indicated a technical amendment was expected to address redundant confirmation language. The sponsor offered L002 to add the clearinghouse payment system and the correct statutory cross‑references.
The committee adopted L002 by unanimous consent and then voted to move SB 25016, as amended, forward. Senator Schneider and stakeholders noted additional floor work would be needed on second reading to finalize precise statutory cross‑references and confirm the clarification language recommended by the Bar Association and bankers.
SB 25016 will proceed to the Committee of the Whole. Committee members recorded unanimous support during the roll call.
Votes at a glance: L002 adopted; SB 25016 as amended moved to the Committee of the Whole with a favorable recommendation; unanimous committee recorded vote.
