RELATING TO FINANCIAL INSTITUTIONS -- THE RHODE ISLAND SPECIAL DEPOSITS, ACT
H7265 creates a new chapter in Title 19 of the Rhode Island General Laws called the Rhode Island Special Deposits Act, adopting a uniform framework for “special deposits” held by banks under an account agreement. The bill defines the parties and key terms, sets the conditions for when a deposit qualifies as a special deposit, and allows the agreement to specify the permissible purpose, beneficiaries, contingencies, and forum for disputes. It is designed to cover arrangements such as escrow-like deposits, security deposits, funds for benefits or compensation, and other commercial, charitable, governmental, or testamentary purposes.
The act also establishes how banks must handle payment obligations, amendments, termination, and disputes involving special deposits. It limits creditor process against the bank except in specified circumstances, restricts injunctions to cases involving material fraud, generally bars setoff or recoupment except as authorized, and states that banks do not owe fiduciary duties with respect to these deposits. It further provides that neither the depositor nor beneficiary has a property interest in the deposit itself, only in the right to payment when the bank becomes obligated to pay, and it supplies rules for termination, including a default five-year term unless the agreement says otherwise.
This bill would add a new statutory chapter to Rhode Island’s banking laws governing special deposits and would supplement existing law on consumer protection, contracts, fraud, bankruptcy, escheat, and abandoned property unless inconsistent with the new chapter. It would create a uniform legal structure for banks, depositors, and beneficiaries, including rules on enforceability, creditor claims, bank liability, amendment of account agreements, and termination of deposits. The act would take effect upon passage and would apply to qualifying agreements executed on or after the effective date, as well as certain preexisting agreements if amended to opt in.
The available voting history shows strong support and no recorded opposition. The House Committee on Corporations advanced the bill unanimously, 12-0, and the full House passed it unanimously, 69-0. No committee transcript excerpts were provided, so the record reflects broad consensus rather than documented debate.
There is little visible contention in the available materials, likely because the bill is a technical uniform-law banking measure. The main policy choices embedded in the text are the limits on creditor process, the prohibition on fiduciary-duty treatment, the restriction on setoff, and the rule that the bank’s obligation is primarily contractual and limited to proximate damages. Those provisions could matter to banks, depositors, beneficiaries, and creditors, but no opposition or specific objections appear in the provided history.