By: Smithee (Senate Sponsor - Creighton) H.B. No. 2240
(In the Senate - Received from the House April 19, 2021;
May 4, 2021, read first time and referred to Committee on Business &
Commerce; May 21, 2021, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 8, Nays 0;
May 21, 2021, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 2240 By: Hancock
A BILL TO BE ENTITLED
AN ACT
relating to the disbursement of funds from a trust fund account by a
title insurance company, title insurance agent, or escrow officer.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2651.202, Insurance Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) For the purpose of this section, "good funds" includes
United States dollars received and deposited in an account through
an Automated Clearing House (ACH) transaction if the ACH
transaction is irrevocable and final and cannot be canceled or
reversed by the consumer once the funds have been directly
transferred from the consumer's bank account. The ACH transaction
must be a bank-to-bank transfer of funds or a deposit of funds from
a consumer's account at a depository institution and must not be
treated as a consumer payment with respect to chargeback and
pullback consumer payment protections. The transferred funds must:
(1) be directly linked to and directly backed by funds
in the consumer's account at the depository institution;
(2) be directly transferred from the consumer's bank
account and directly deposited into the settlement service
provider's escrow account by ACH transfer in accordance with the
standards of any applicable governing body or standards
organization with oversight over ACH transactions;
(3) at all points during the transfer process, utilize
a unique identification and tracking system that designates the
funds for their authorized purpose;
(4) not be subject to third-party access or
commingling of funds at any point during the transfer process; and
(5) not utilize an intermediary account other than by
a financial institution acting as ACH originator and operator as
part of the ACH network.
SECTION 2. Section 2652.004, Insurance Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) For the purpose of this section, "good funds" includes
United States dollars received and deposited in an account through
an Automated Clearing House (ACH) transaction if the ACH
transaction is irrevocable and final and cannot be canceled or
reversed by the consumer once the funds have been directly
transferred from the consumer's bank account. The ACH transaction
must be a bank-to-bank transfer of funds or a deposit of funds from
a consumer's account at a depository institution and must not be
treated as a consumer payment with respect to chargeback and
pullback consumer payment protections. The transferred funds must:
(1) be directly linked to and directly backed by funds
in the consumer's account at the depository institution;
(2) be directly transferred from the consumer's bank
account and directly deposited into the settlement service
provider's escrow account by ACH transfer in accordance with the
standards of any applicable governing body or standards
organization with oversight over ACH transactions;
(3) at all points during the transfer process, utilize
a unique identification and tracking system that designates the
funds for their authorized purpose;
(4) not be subject to third-party access or
commingling of funds at any point during the transfer process; and
(5) not utilize an intermediary account other than by
a financial institution acting as ACH originator and operator as
part of the ACH network.
SECTION 3. This Act takes effect September 1, 2021.
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