AZ LEG Escrow Agents, Deposits Bill

On Mar. 14, AZ LEG passed bill on escrow agents, reciprocal deposits.

  • AZ LEG passed SB 1270 relating to escrow agents, notice of escrow money deposits and system of reciprocal deposits, amended AZ LEG 6-834 (deposit of monies).
  • Allowed an agent to use a system of reciprocal deposits to provide additional insurance with the FDIC for monies held by the agent, if the eligible depository meets conditions.
  • Bill Provisions
  • Escrow agent shall provide to depositing buyer or seller, adequate notice of buyer's, seller's right to earn interest on deposited monies within 3 days of escrow receipt.
  • Notice must contain good faith estimate of interest amount that may be earned during life of escrow account, using savings account interest rate for a 30-day period.
  • Escrow agent may use a system of reciprocal deposits to provide access to additional insurance with Federal Deposit Insurance Corporation for deposited escrow money.
  • If both eligible depository arranges for deposit in a federally insured bank or receives an amount of federally insured deposits from customers of other financial institutions.
  • The bill also provides definitions for eligible depositories or reciprocal depositories.
  • Legislative History
  • On Jan. 16, 2024, bill introduced in House; On Feb. 6, 2024, bill passed in the House.
  • On Feb. 21, 2024, bill introduced in the Senate; on Mar. 12, 2024 bill passed Senate.
  • On Mar. 14, 2024, bill sent to governor, awaits signature/approval or veto override.
  • Effectiveness
  • Bill effective on Sep. 14, 2024 (91 days after Jun. 15 adjournment).
  • Mar. 18, 2024 AZ LEG Approval
  • On Mar. 18, 2024, AZ LEG governor approved bill SB 1270 and assigned Chapter 4.

Regulators AZ LEG
Entity Types Bank; MG Orig; Servicer; Thrift
Reference PR, Ch. 4, 3/18/2024; Bill SB1270, 3/14/2024; Citation: AZ LEG 6-834;
Functions Compliance; Financial; Legal
Countries United States of America
Products Banking; Deposits; Loan; Mortgage
Regions Am
Rule Type Final
Rule Date 3/14/2024
Effective Date 9/14/2024
Rule Id 204772
Linked to N/A
Reg. Last Update 3/18/2024
Report Section US Banking

Last substantive update on 03/19/2024