Requires brokers who receive monies in a fiduciary capacity to deposit such monies in an interest on broker account

BILL NUMBER:S1715

Title of bill

An act to amend the real property law and the state finance law, in relation to brokers fiduciary funds

Purpose or general idea of bill

To direct real estate brokers to hold escrowed monies in certain specialized accounts.

Summary of specific provisions

This bill would direct real estate brokers to hold all escrowed monies held for the benefits of others in specialized Interest On Brokers Accounts (IOBA), patterned after Interest On Lawyers' Accounts (IOLA). All interest earned from IOBA accounts would flow to the benefit of civil legal service funding.

Justification

In 1993 Judiciary Law Sec. 497 was enacted, which provided fur attorney's escrow monies to be held in specialized IOLA accounts. The interest proceeds from these accounts were then used to fund much needed civil legal services. It is submitted that the extension of these accounts for the benefit of civil legal services would be a sensible and logical step which would likewise benefits those with civil legal service needs, but without the resources to pay for same. This bill extends the similar guidelines to financial institutions and brokers applicable to said funds as had been made applicable to attorneys pursuant to the aforementioned IOLA legislation.

Prior legislative history

S.2974 of 2009 03/09/09 REFERRED TO JUDICIARY 01/06110 REFERRED TO JUDICIARY

Fiscal implications for state and local governments

None.

Effective date

Immediately, however, Section 1 of the bill shall not take effect until the Secretary of State, the board of trustees of the IOLA fund, and the Internal Revenue Service shall have provided appropriate certifications as to the nontaxable nature of interest accrued in such accounts.