Bill > H5332

This bill establishes the Rhode Island Special Deposits Act, which creates a comprehensive legal framework for a new type of bank deposit arrangement called a "special deposit." The act defines a special deposit as a funded bank account that serves a specific permissible purpose (such as escrow, security deposits, or benefits distribution), involves at least two beneficiaries, and is subject to a contingency. The legislation provides detailed provisions governing how these special deposits will be managed, including the rights and obligations of banks, depositors, and beneficiaries. Key protections include limiting a bank's liability, preventing creditor claims against the special deposit in most circumstances, and ensuring that the deposit serves a clear purpose. The act specifies that neither depositors nor beneficiaries have a direct property interest in the special deposit itself, only in the right to receive payment when specific conditions are met. Banks are given guidance on when and how they can pay beneficiaries, with provisions for handling situations where funds are insufficient. The special deposit automatically terminates after five years unless otherwise specified in the agreement, and the law aims to provide clarity and uniformity in how these financial arrangements are handled. The act applies to new account agreements and can be retroactively applied to existing agreements if all parties consent.

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