BILL NUMBER:  S2712

 TITLE OF BILL :  An act to amend the banking law, in relation to
attorney 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 :

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.