New YorkA 53452025-2026 Regular SessionHouseWALLET

Enacts the uniform special deposits act

Sponsored By: Pamela J. Hunter (Democratic)

Became Law

BANKSCODESRULES

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 0 costs, 3 mixed.

Stronger shield from creditor claims

Creditors cannot garnish or levy most special‑deposit funds. They can only reach amounts the bank is already obligated to pay a named beneficiary. The creditor must serve the bank, give enough information from the bank’s records to identify the depositor and beneficiary, and allow a reasonable time to act. Serving the bank does not create a new right against the beneficiary.

When banks pay from deposits

Unless the account says otherwise, the bank pays a beneficiary when enough collected funds are in the deposit. If money is short, the bank’s duty is limited to what is on hand. With more than one beneficiary, payments can be pro rata or by elected shares. A special deposit ends five years after first funding, unless the account sets a different term. If a beneficiary cannot be found then, any leftover goes to the depositor and the bank’s duty ends.

Protections when account terms change

Core protections in this law cannot be waived by contract unless the law allows it. If a beneficiary is a party to the account, changes need the beneficiary’s consent. If a beneficiary is not a party, changes are allowed only if they do not materially hurt the beneficiary’s right to be paid.

Bank setoff limits and liability

The bank is not a fiduciary for a special deposit. The bank’s duty comes from the account agreement and this law. Liability is limited to direct losses caused by a breach; no punitive or consequential damages unless other law allows them. The bank may rely in good faith on records that look genuine. The bank cannot set off or recoup from a special deposit unless the account clearly allows it, including for paying a beneficiary, overdraft fees, or bank costs tied to the deposit.

What counts as a special deposit

The law defines special deposits and who is covered. A deposit qualifies only if the account names beneficiaries, is created by an account agreement, uses authorized money, states a permissible purpose, and is tied to a stated event. The deposit must keep serving that purpose until it ends; if not, the special‑deposit rules stop for those funds. The account can choose New York law and New York courts for disputes. These rules apply to deposits and agreements made on or after the law’s effective date.

Sponsors & Cosponsors

Sponsor

Pamela J. Hunter
Democratic • House

Cosponsors

Al Taylor
Democratic • House
Nader Sayegh
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 55 • No: 5

House vote • 6/5/2025

FLOOR Vote