SB 470 — Uniform Special Deposits Act

CS for SB 470 WEST VIRGINIA LEGISLATURE REGULAR SESSION Committee Substitute for Committee Substitute for Senate Bill 470 By Senators OliverioOliverio, Trump, and TrumpNelson [Originating in the Committee on Banking and Insurance;

reported onFebruary January24, 30, 2024] CS for CS for SB 470 A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §31A-9-1, §31A-9-2, §31A-9-3, §31A-9-4, §31A-9-5, §31A-9-6, §31A-9-7, §31A-9-8, §31A-9-9, §31A-9-10, §31A-9-11, §31A-9-12, §31A-9-13, §31A-9-14, §31A-9- 15, and §31A-9-16, all relating to the Uniform Special Deposits Act.Act;

providing citation;

defining terms;

providing for applicability to special deposits in certain circumstances;

providing exceptions;

allowing variation by agreement or amendment;

setting forth requirements for a special deposit;

requiring permissible purpose for special deposit;

allowing termination of special deposit in certain circumstances;

describing when bank is obligated to pay beneficiary;

clarifying who has a property interest in special deposit;

providing for creditor process enforceability in certain circumstances;

permitting injunctive or similar relief by court;

generally prohibiting recoupment or set off against special deposit;

providing exceptions to prohibition on recoupment or set off against special deposit;

describing duties and liability of bank holding special deposit;

terminating special deposit after five years unless otherwise agreed;

providing for payment of remaining balance;

providing for supplementation of article by specified West Virginia laws;

providing for promotion of uniformity;

and providing applicability after effective date.

DefinitionsDefinitions. In this article:

In this article:

1 CS for CS for SB 470 (2) "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, trust company, and a bank as defined in §31A-1- 2 of this code.

1 CS for SB 470 (5) "Creditor process" means attachment, garnishment, levy, notice of lien, sequestration, or similar process issued by or on behalf of a creditor or other claimant.

or 2 CS for CS for SB 470 (ii) If the bank has not established and maintained reasonable compliance with a routine described in subparagraph (i) of this paragraph or otherwise exercised due diligence, implied knowledge of the fact that would have come to the attention of an individual to whom the bank has assigned responsibility for the special deposit.

2 CS for SB 470 (i) In escrow, including for a purchase and sale, lease, buyback, or other transaction;

or 3 CS for CS for SB 470 (E) Hold margin, other cash collateral, or funds that support the orderly functioning of financial market infrastructure or the performance of an obligation with respect to the infrastructure.

(11)(12) "Person" means an individual, estate, business or nonprofit entity, government or governmental subdivision, agency, or instrumentality, or other legal entity.

(12)(13) "Record" means information:

(13)(14) "Special deposit" means a deposit that satisfies §31A-9-5 of this code.

3(15) CS for SB 470 (14) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any other territory or possession subject to the jurisdiction of the United States.

Choicechoice of Law;law;

Forum.forum.

4 CS for CS for SB 470 (1) A right or obligation relating to a deposit other than a special deposit under this article;

Variation by Agreementagreement or Amendment.amendment.

(c) If a beneficiary is a party to an account agreement, the bank and the depositor may amend the agreement without the consent of the beneficiary only if the agreement expressly 4 CS for SB 470 permits the amendment.

Requirements for Specialspecial Deposit.deposit.

5 CS for CS for SB 470 (3) Denominated in a medium of exchange that is currently authorized or adopted by a domestic or foreign government;