PRIA Logo™
New YorkA 53452025-2026 Regular SessionHouse

Enacts the uniform special deposits act

Sponsored By: Pamela J. Hunter (Democratic)

Signed by Governor

BANKSCODESRULES

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

7 provisions identified: 2 benefits, 0 costs, 5 mixed.

Special deposits gain protection from creditors

Creditors generally cannot enforce claims against a bank holding a special deposit. They can reach amounts the bank owes a depositor or beneficiary only after serving the bank with enough identifying information. The bank must also have a reasonable chance to act; earlier service creates no creditor right against the bank. Courts can block payment only when it involves or helps carry out material fraud concerning the deposit. Other law still governs liens on contingent interests and challenges to fraudulent transfers.

New options for special deposit accounts

Beginning January 1 of the year after enactment, the law covers new qualifying special deposit agreements, including escrow and tenant security deposits. The agreement must choose this law and name a permitted purpose; deposits need at least two beneficiaries and government-authorized currency. Payment must depend on an event occurring first. Parties can choose this law and a New York dispute forum even without another connection to New York. Earlier agreements qualify only when everyone with amendment rights agrees and the deposit meets these requirements.

Banks face limits on deposit deductions

Banks generally cannot take special deposit funds to offset debts. The agreement can allow deductions for beneficiary payments, up to the amount owed, overdraft-related fees, and costs directly tied to the deposit. Banks can also reverse earlier credits when New York mistake-and-repayment law permits. Banks retain the right to offset debts against payments they owe a beneficiary.

Banks owe duties but limit liability

Banks must follow the agreement and law, but holding a special deposit creates no duty to act as a trustee. When payment is owed, the bank becomes a debtor to the beneficiary. Banks owe damages caused by noncompliance; indirect losses, special damages, and punishment damages are excluded unless other New York law allows them. Banks must review required payment records within a reasonable time and can honestly rely on records that look genuine. Unless the agreement says otherwise, banks need not check whether the deposit still serves its stated purpose.

Deposit agreements protect rights with exceptions

Agreements generally cannot waive core deposit requirements or creditor protections, but can change specified payment, bank-duty, and ending rules. They cannot substantially excuse liability or limit remedies for failing to meet duties under this law. Banks and depositors can amend without a beneficiary's consent when that beneficiary signed the agreement only if it expressly permits this. For nonsigning beneficiaries known to know the terms, changes without consent cannot materially harm payment rights. When banks and depositors do not know whether a nonsigning beneficiary knows the terms, they must act in good faith.

Deposit recipients gain limited payment rights

Depositors and beneficiaries do not own the special deposit itself; their property right is to payment when the bank owes it. Unless the agreement says otherwise, payment is immediately due when the required event occurs, the bank knows, and collected funds suffice. If funds fall short, the bank's payment duty is excused. A beneficiary can instead accept the available money, or a proportional share when there are multiple beneficiaries. Accepting that payment ends the bank's obligation to that beneficiary.

Special deposits end and return balances

Unless the agreement says otherwise, a special deposit ends five years after it is first funded. If money remains and an entitled beneficiary cannot be identified or found, the bank pays the depositor or depositors. That payment ends the bank's further obligations for the deposit. The deposit must serve a permitted purpose named in its agreement throughout its life. If a bank or court finds that purpose has ended, later deposits lose property-interest, creditor-process, court-payment, and bank-offset protections; the bank can terminate the deposit.

Sponsors & Cosponsors

Sponsor

  • Pamela J. Hunter

    Democratic • House

Cosponsors

  • Al Taylor

    Democratic • House

  • Nader Sayegh

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 201 • No: 5

Senate vote • 6/5/2025

FLOOR Vote

Yes: 55 • No: 5

House vote • 5/29/2025

Assembly floor vote

Yes: 146 • No: 0

Actions Timeline

  1. SIGNED CHAP.583

    12/5/2025House

  2. DELIVERED TO GOVERNOR

    12/1/2025House

  3. RETURNED TO ASSEMBLY

    6/5/2025Senate

  4. PASSED SENATE

    6/5/2025Senate

  5. 3RD READING CAL.1171

    6/5/2025Senate

  6. SUBSTITUTED FOR S4323

    6/5/2025Senate

  7. REFERRED TO BANKS

    5/29/2025Senate

  8. DELIVERED TO SENATE

    5/29/2025House

  9. PASSED ASSEMBLY

    5/29/2025House

  10. ORDERED TO THIRD READING RULES CAL.316

    5/29/2025House

  11. RULES REPORT CAL.316

    5/29/2025House

  12. REPORTED

    5/29/2025House

  13. REPORTED REFERRED TO RULES

    5/28/2025House

  14. REPORTED REFERRED TO CODES

    5/19/2025House

  15. REFERRED TO BANKS

    2/13/2025House

Bill Text

  • Original

    2/13/2025

    PDF

Related Bills

Back to State Legislation