Bill > B26-0032

This bill establishes the Uniform Special Deposits Act in the District of Columbia, creating a comprehensive legal framework for special deposits in financial institutions. The act defines a special deposit as a funds deposit in a bank that benefits at least two beneficiaries, is for a permissible purpose (such as escrow, security deposits, or financial market infrastructure support), and is subject to a specific contingency. The bill clarifies that neither the depositor nor the beneficiary have a property interest in the special deposit itself, but rather have a right to receive payment under certain conditions. Banks are given specific guidelines about their obligations, including when they must pay a beneficiary, how they can handle creditor processes, and limitations on their ability to exercise setoff or recoupment rights. The act provides a default five-year term for special deposits and requires banks to act in good faith, without creating a fiduciary duty. Importantly, the bill is designed to promote uniformity across jurisdictions that adopt similar legislation and applies to both new and existing deposit agreements where all parties consent to its provisions. The legislation aims to provide clear, standardized rules for handling special deposits, protecting the interests of depositors, beneficiaries, and banks by establishing transparent guidelines for these financial arrangements.

Business and Industry

https://lims.dccouncil.gov/Legislation/B26-0032