Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Banking topic
No spam. Unsubscribe anytime.
Uniform Special Deposits Act explained: deposit protections and opt-in escrow-like accounts
Summary
HB1502 would adopt the Uniform Special Deposits Act to clarify protections for opt-in special deposit accounts (escrow-like arrangements) that shield funds from a depositor’s creditors until contingencies trigger payment to beneficiaries; witnesses said existing residential tenant protections remain unchanged and commercial users could benefit.
Representative John Hunt introduced HB1502 and called forward Charles Mooney, an appointed Uniform Law Commission commissioner, to explain the Uniform Special Deposits Act and why New Hampshire should adopt it.
Mooney described special deposits as opt-in bank or credit-union accounts that function like protected escrow arrangements for commercial and consumer transactions: they must be established by an express deposit agreement, name beneficiaries and contingencies, and when properly designated are protected from a depositor’s creditors and limited from bank setoff except for bank fees connected to the account.
Mooney said the act clarifies problems in current law about whether a depositor’s insolvency allows a trustee or creditors to reach funds and ensures a special deposit — when properly agreed — is not property of the depositor for creditors to reach. He also noted the law would not disturb existing escrow or tenant-deposit records; parties can amend existing agreements to opt into the special-deposit treatment going forward.
Senators asked whether existing escrow arrangements change (they do not) and whether the account agreement must be between the bank and depositor (yes — the depository agreement must expressly designate the special deposit). The committee closed the HB1502 hearing.
