Senate committee reports out measure creating 'special deposit' protections for accounts

The New York State Senate Banking Committee on Tuesday reported out S.4323, a bill to amend the banking law to enact the Uniform Special Deposits Act. Senator James Sanders Jr., chair of the committee, called for and took a motion to move the bill forward; the committee voted and the bill was reported out.

The measure seeks to create a statutory category called a "special deposit" to protect funds held in an account from actions that could prevent their delivery in a contingency, such as a bankruptcy proceeding. Bobby Vardette, Senate Programming Council, told the committee that the bill "does not in any way affect the interest that would otherwise be affected or go to a particular place based on where the account is ultimately originated." He added, "a special deposit is not a real like a new sort of account. It goes wherever the account, itself, that interest would go."

Supporters characterized the change as a legal-protection clarification rather than a change to how interest is credited. The committee accepted a motion to report the bill; the chair announced the measure "is passed and it's been reported out." The committee did not record a roll-call tally in the transcript.

Senate staff counsel Talia handled the bill call and procedural questions during the item. The bill was introduced on the agenda as sponsored by Senator Krueger.

The action advances S.4323 from committee; further steps would depend on scheduling by the Senate leadership and any reconciliation if companion language appears in the Assembly.