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- Referred to banks
- Referred to banks
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Ban Bank Fees for Trusts
In Assembly Committee · Banks · Sponsor Latrice Walker
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5001
2019-2020 Regular Sessions
IN SENATE
April 3, 2019
Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to attorney trust accounts
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The banking law is amended by adding a new section 9-x to read as follows:
§ 9-x. Attorney trust accounts. Notwithstanding any other provision of law or rule or regulation to the contrary, no bank or trust company regulated by the state of New York shall charge a service fee or require a minimum balance on an attorney trust account, provided that no more than fifteen debit or credit transactions per month are made in connection with such account and provided, further, that such attorney trust account is non-interest bearing or is an IOLA (interest on lawyer accounts) account. For the purposes of this section, an attorney trust account shall mean a special banking or checking account required by law or a rule of court for the deposit of funds belonging to law clients or other persons in the practice of law.
§ 2. This act shall take effect on the thirtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05951-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to attor- ney trust accounts
Purpose summary of provisions
This bill would add new section 9-x to the Banking Law to provide that no bank or trust company regulated by the State of New York shall charge a service fee or require a minimum balance on an attorney trust account, provided that such account is required by law and that no more than fifteen debit or credit transactions per month are made in connection with such account and further provided that such account is non-interest bearing. This bill would also define 'attorney trust account' as a special bank or checking account required by a rule of court for deposit of funds belonging to legal clients or other persons in the practice of law.
Justification
An attorney in possession of any asset or sum of money belonging to a client is a fiduciary and must not commingle client funds with his or her own funds or personal or business accounts. Furthermore, an attorney must maintain in a bank or trust company within the State of New York in his or her own name, or in the name of the firm of attorneys of which he or she is a member, a special account independent from his or her personal accounts.
In many areas of the state, banks require minimum deposits or service fees for the maintenance of these accounts. Such requirements can be financially burdensome to the small practicing attorney who handles only a few cases which would require the collection and deposit of clients' funds.
This bill would ameliorate this situation by providing that no bank or trust company regulated by New York State shall charge a service fee or require a minimum balance on an attorney trust account provided that such account is required by law and that no more than fifteen debit or credit transactions per month are made in connection with such account.
Prior legislative history
2017-18: S2712 - Referred to Banks 2015-16: S.2868A - Amend and Recommit to Banks 2013-14: S.3240 - Referred to Banks 2012: S.6216 - Referred to Banks
Fiscal implications
None.
Effective date
This act shall take effect on the thirtieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.