SB 1270
Initials PB Page 1 Transmitted
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
Senate: FICO DP 5-0-2-0 | 3
rd
Read 27-0-3-0
House: COM DP 10-0-0-0 | 3
rd
Read 59-0-1-0
SB 1270: reciprocal deposits; escrow agents; definitions
Sponsor: Senator Mesnard, LD 13
Transmitted to the Governor
Overview
Allows an escrow agent to use a system of reciprocal deposits to provide additional insurance
with the Federal Deposit Insurance Corporation (FDIC).
History
An escrow agent is any person engaged in the business of accepting escrows. An escrow is a
type of financial instrument, typically an account, held by an escrow agent used to facilitate
a transaction between parties. Statute requires an escrow agent to deposit and maintain all
escrow funds in a financial institution that does business in Arizona. An escrow agent must
keep all escrow monies separate from monies belonging to the agent and to clearly designate
escrow monies as escrow accounts or another appropriate label upon deposit (A.R.S §§ 6-801
and 6-834).
The FDIC insures deposit accounts up to $250,000. Reciprocal deposit networks interchange
deposited funds that exceed the FDIC limit between insured financial institutions within the
network and allow depositors to receive insurance coverage for the entire amount of deposits.
Following a deposit exceeding the insurance limit from a depositor, the financial institution
uses the network to simultaneously place the uninsured portion with other insured financial
institutions and receive equal amounts of insured deposits in return (FDIC).
Provisions
1. Authorizes an escrow agent to use a system of reciprocal deposits to provide access to
additional insurance with the FDIC for monies deposited with the escrow agent, if the
eligible depository:
a) arranges for the deposit of the monies in one or more federally insured banks, savings
banks or savings and loan associations, regardless of location, for the escrow agent's
account; and
b) receives an amount of federally insured deposits from customers of other financial
institutions equal to or greater than the amount of the monies initially deposited by
the escrow agent. (Sec 1)
2. Defines eligible depository and reciprocal deposit. (Sec. 1)
3. Makes technical changes. (Sec 1)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note