BILL NUMBER: S5460

SPONSOR: PARKER
 
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:

2019-20: S5001 - Referred to Banks
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.