Utah 2025 Regular Session

Utah Senate Bill SB0294 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy S.B. 294
	1	+	03-07 22:21 2nd Sub. (Salmon) S.B. 294
	2	+	Jordan D. Teuscher proposes the following substitute bill:
2	3		1
3	4		Finance Amendments
4	5		2025 GENERAL SESSION
5	6		STATE OF UTAH
6	7		Chief Sponsor: Michael K. McKell
7	8		House Sponsor: Jordan D. Teuscher
8	9		2
9	10
10	11		3
11	12		LONG TITLE
12	13		4
13	14		General Description:
14	15		5
15	16		This bill enacts provisions related to finance.
16	17		6
17	18		Highlighted Provisions:
18	19		7
19	20		This bill:
20	21		8
21	22		▸ modifies the exclusions to the definition of title loan;
22	23		9
23	24		▸ defines terms;
24	25		10
25	26		▸ establishes the scope of the Uniform Special Deposits Act;
26	27		11
27	28		▸ allows parties to an agreement under the Uniform Special Deposits Act to choose a forum
28	29		12
29	30		in Utah for settling a dispute, regardless of whether the dispute occurred in Utah;
30	31		13
31	32		▸ provides that sections of the Uniform Special Deposits Act may vary by agreement or
32	33		14
33	34		amendment;
34	35		15
35	36		▸ establishes requirements for a special deposit;
36	37		16
37	38		▸ requires that a special deposit serve a permissible purpose;
38	39		17
39	40		▸ provides the conditions under which a bank shall pay a beneficiary funds in the balance of
40	41		18
41	42		a special deposit;
42	43		19
43	44		▸ establishes the interest of a depositor or beneficiary in a special deposit;
44	45		20
45	46		▸ allows a court to grant relief to prevent a bank from paying a depositor or beneficiary of a
46	47		21
47	48		special deposit if a payment would result in fraud;
48	49		22
49	50		▸ provides that except in certain circumstances, a bank may not exercise a right of
50	51		23
51	52		recoupment or set off against a special deposit;
52	53		24
53	54		▸ establishes the duties and liabilities of a bank in regards to a special deposit;
54	55		25
55	56		▸ provides that a special deposit terminates five years after the date on which the special
56	57		26
57	58		deposit was first funded;
58	59		27
59		-	▸ describes the application of governing law over special deposits; ~~S.B. 294 Enrolled Copy~~
	60	+	▸ describes the application of governing law over special deposits;
60	61		28
61	62		▸ provides that the provisions of this act only apply to an agreement executed after the
	63	+	2nd Sub. S.B. 294 2nd Sub. (Salmon) S.B. 294 03-07 22:21
62	64		29
63	65		effective date of this bill, unless the parties to a special deposit amend the agreement;
64	66		30
65	67		▸ provides that the provisions of this act are severable if a provision of the act is found
66	68		31
67	69		invalid;
68	70		32
69	71		▸ establishes the scope of the Uniform Mortgage Modification Act;
70	72		33
71	73		▸ codifies the types of modifications that may be made to a mortgage loan that will not
72	74		34
73	75		materially prejudice interest holders; and
74	76		35
75	77		▸ contains safe harbor provisions for mortgage modifications that do not materially
76	78		36
77	79		prejudice the holders of a junior interest.
78	80		37
79	81		Money Appropriated in this Bill:
80	82		38
81	83		None
82	84		39
83	85		Other Special Clauses:
84	86		40
85	87		None
86	88		41
87	89		Utah Code Sections Affected:
88	90		42
89	91		AMENDS:
90	92		43
91	93		7-24-102, as last amended by Laws of Utah 2015, Chapter 284
92	94		44
93	95		ENACTS:
94	96		45
95	97		7-28-101, Utah Code Annotated 1953
96	98		46
97	99		7-28-102, Utah Code Annotated 1953
98	100		47
99	101		7-28-103, Utah Code Annotated 1953
100	102		48
101	103		7-28-104, Utah Code Annotated 1953
102	104		49
103	105		7-28-105, Utah Code Annotated 1953
104	106		50
105	107		7-28-106, Utah Code Annotated 1953
106	108		51
107	109		7-28-107, Utah Code Annotated 1953
108	110		52
109	111		7-28-108, Utah Code Annotated 1953
110	112		53
111	113		7-28-109, Utah Code Annotated 1953
112	114		54
113	115		7-28-110, Utah Code Annotated 1953
114	116		55
115	117		7-28-111, Utah Code Annotated 1953
116	118		56
117	119		7-28-112, Utah Code Annotated 1953
118	120		57
119	121		7-28-113, Utah Code Annotated 1953
120	122		58
121	123		7-28-114, Utah Code Annotated 1953
122	124		59
123	125		7-28-115, Utah Code Annotated 1953
124	126		60
125	127		7-28-116, Utah Code Annotated 1953
126	128		61
127	129		70D-4-101, Utah Code Annotated 1953
128		-	- 2 - Enrolled Copy S.B. 294
129	130		62
130	131		70D-4-201, Utah Code Annotated 1953
	132	+	- 2 - 03-07 22:21 2nd Sub. (Salmon) S.B. 294
131	133		63
132	134		70D-4-301, Utah Code Annotated 1953
133	135		64
134	136		70D-4-401, Utah Code Annotated 1953
135	137		65
136	138		70D-4-501, Utah Code Annotated 1953
137	139		66
138	140		70D-4-601, Utah Code Annotated 1953
139	141		67
140	142
141	143		68
142	144		Be it enacted by the Legislature of the state of Utah:
143	145		69
144	146		Section 1. Section 7-24-102 is amended to read:
145	147		70
146	148		7-24-102 . Definitions.
147	149		71
148	150		As used in this chapter:
149	151		72
150	152		(1) "Nationwide database" means the Nationwide Mortgage Licensing System and
151	153		73
152	154		Registry, authorized under 12 U.S.C. Sec. 5101 for federal licensing of mortgage loan
153	155		74
154	156		originators.
155	157		75
156	158		(2) "Rollover" means the extension or renewal of the term of a title loan.
157	159		76
158	160		(3)(a) "Title lender" means a person that extends a title loan.
159	161		77
160	162		(b) "Title lender" includes a person that:
161	163		78
162	164		(i) arranges a title loan on behalf of a title lender;
163	165		79
164	166		(ii) acts as an agent for a title lender; or
165	167		80
166	168		(iii) assists a title lender in the extension of a title loan.
167	169		81
168	170		(4)(a) "Title loan" means a loan secured by the title to a:
169	171		82
170	172		(i) motor vehicle, as defined in Section 41-6a-102;
171	173		83
172	174		(ii) mobile home, as defined in Section 41-6a-102; or
173	175		84
174	176		(iii) motorboat, as defined in Section 73-18-2.
175	177		85
176	178		(b) "Title loan" includes a title loan extended at the same premise on which any of the
177	179		86
178	180		following are sold:
179	181		87
180	182		(i) a motor vehicle, as defined in Section 41-6a-102;
181	183		88
182	184		(ii) a mobile home, as defined in Section 41-6a-102; or
183	185		89
184	186		(iii) a motorboat, as defined in Section 73-18-2.
185	187		90
186	188		(c) "Title loan" does not include:
187	189		91
188	190		(i) a purchase money loan;
189	191		92
190	192		(ii) a loan made in connection with the sale of a:
191	193		93
192	194		(A) motor vehicle, as defined in Section 41-6a-102;
193	195		94
194	196		(B) mobile home, as defined in Section 41-6a-102; or
195	197		95
196	198		(C) motorboat, as defined in Section 73-18-2;[ or]
197		-	- 3 - S.B. 294 Enrolled Copy
198	199		96
199	200		(iii) a loan extended by an institution listed in Section 7-24-305[.] ; or
	201	+	- 3 - 2nd Sub. (Salmon) S.B. 294 03-07 22:21
200	202		97
201	203		(iv) a loan with a repayment term that is longer than 364 days.
202	204		98
203	205		Section 2. Section 7-28-101 is enacted to read:
204	206		99
205	207
206	208		CHAPTER 28. UNIFORM SPECIAL DEPOSITS ACT
207	209		100
208	210		7-28-101 . Definitions.
209	211		101
210	212		As used in this chapter:
211	213		102
212	214		(1) "Account agreement" means an agreement that:
213	215		103
214	216		(a) is in a record between a bank and one or more depositors;
215	217		104
216	218		(b) may have one or more beneficiaries as additional parties; and
217	219		105
218	220		(c) states the intention of the parties to establish a special deposit governed by this
219	221		106
220	222		chapter.
221	223		107
222	224		(2)(a) "Bank" means a person engaged in the business of banking.
223	225		108
224	226		(b) "Bank" includes a savings bank, savings and loan association, credit union, and trust
225	227		109
226	228		company.
227	229		110
228	230		(c) Each branch or separate office of a bank is a separate bank for the purpose of this
229	231		111
230	232		chapter.
231	233		112
232	234		(3) "Beneficiary" means a person that:
233	235		113
234	236		(a) is identified as a beneficiary in an account agreement; or
235	237		114
236	238		(b) if not identified as a beneficiary in an account agreement, may be entitled to payment
237	239		115
238	240		from a special deposit:
239	241		116
240	242		(i) under the account agreement; or
241	243		117
242	244		(ii) on termination of the special deposit.
243	245		118
244	246		(4) "Contingency" means an event or circumstance stated in an account agreement that is
245	247		119
246	248		not certain to occur but shall occur before the bank is obligated to pay a beneficiary.
247	249		120
248	250		(5) "Creditor process" means attachment, garnishment, levy, notice of lien, sequestration, or
249	251		121
250	252		similar process issued by or on behalf of a creditor or other claimant.
251	253		122
252	254		(6) "Depositor" means a person that establishes or funds a special deposit.
253	255		123
254	256		(7) "Good faith" means honesty in fact and observance of reasonable commercial standards
255	257		124
256	258		of fair dealing.
257	259		125
258	260		(8) "Knowledge of a fact" means:
259	261		126
260	262		(a) with respect to a beneficiary, actual knowledge of the fact; or
261	263		127
262	264		(b) with respect to a bank holding a special deposit:
263	265		128
264	266		(i) if the bank:
265	267		129
266	268		(A) has established a reasonable routine for communicating material information
267		-	- 4 - Enrolled Copy S.B. 294
268	269		130
269	270		to an individual to whom the bank has assigned responsibility for the special
	271	+	- 4 - 03-07 22:21 2nd Sub. (Salmon) S.B. 294
270	272		131
271	273		deposit; and
272	274		132
273	275		(B) maintains reasonable compliance with the routine, actual knowledge of the
274	276		133
275	277		fact by that individual; or
276	278		134
277	279		(ii) if the bank has not established and maintained reasonable compliance with a
278	280		135
279	281		routine described in Subsection (8)(b)(i) or otherwise exercised due diligence,
280	282		136
281	283		implied knowledge of the fact that would have come to the attention of an
282	284		137
283	285		individual to whom the bank has assigned responsibility for the special deposit.
284	286		138
285	287		(9) "Obligated to pay a beneficiary" means a beneficiary is entitled under the account
286	288		139
287	289		agreement to receive from the bank a payment when:
288	290		140
289	291		(a) a contingency has occurred; and
290	292		141
291	293		(b) the bank has knowledge the contingency has occurred.
292	294		142
293	295		(10)(a) "Permissible purpose" means a governmental, regulatory, commercial,
294	296		143
295	297		charitable, or testamentary objective of the parties stated in an account agreement.
296	298		144
297	299		(b) "Permissible purpose" includes an objective to:
298	300		145
299	301		(i) hold funds:
300	302		146
301	303		(A) in escrow, including for a purchase and sale, lease, buyback, or other
302	304		147
303	305		transaction;
304	306		148
305	307		(B) as a security deposit of a tenant;
306	308		149
307	309		(C) that may be distributed to a person as remuneration, retirement or other
308	310		150
309	311		benefit, or compensation under a judgment, consent decree, court order, or
310	312		151
311	313		other decision of a tribunal; or
312	314		152
313	315		(D) for distribution to a defined class of persons after identification of the class
314	316		153
315	317		members and the class members' interest in the funds;
316	318		154
317	319		(ii) provide assurance with respect to an obligation created by contract, such as
318	320		155
319	321		earnest money to ensure a transaction closes;
320	322		156
321	323		(iii) settle an obligation that arises in the operation of a payment system, securities
322	324		157
323	325		settlement system, or other financial market infrastructure;
324	326		158
325	327		(iv) provide assurance with respect to an obligation that arises in the operation of a
326	328		159
327	329		payment system, securities settlement system, or other financial market
328	330		160
329	331		infrastructure; or
330	332		161
331	333		(v) hold margin, other cash collateral, or funds that support the orderly functioning of
332	334		162
333	335		financial market infrastructure or the performance of an obligation with respect to
334	336		163
335	337		the infrastructure.
336		-	- 5 - S.B. 294 Enrolled Copy
337	338		164
338	339		(11)(a) "Person" means an individual, estate, business or nonprofit entity, government or
	340	+	- 5 - 2nd Sub. (Salmon) S.B. 294 03-07 22:21
339	341		165
340	342		governmental subdivision, agency, or instrumentality, or other legal entity.
341	343		166
342	344		(b) "Person" includes a protected series, however denominated, of an entity if the
343	345		167
344	346		protected series is established under law that limits, or limits if conditions specified
345	347		168
346	348		under law are satisfied, the ability of a creditor of the entity or of any other protected
347	349		169
348	350		series of the entity to satisfy a claim from assets of the protected series.
349	351		170
350	352		(12) "Record" means information:
351	353		171
352	354		(a) inscribed on a tangible medium; or
353	355		172
354	356		(b) stored in an electronic or other medium and retrievable in perceivable form.
355	357		173
356	358		(13) "Special deposit" means a deposit that satisfies Section 7-28-104.
357	359		174
358	360		(14)(a) "State" means a state of the United States, the District of Columbia, Puerto Rico,
359	361		175
360	362		the United States Virgin Islands, or any other territory or possession subject to the
361	363		176
362	364		jurisdiction of the United States.
363	365		177
364	366		(b) "State" includes an agency or instrumentality of the state.
365	367		178
366	368		Section 3. Section 7-28-102 is enacted to read:
367	369		179
368	370		7-28-102 . Scope -- Choice of law -- Forum.
369	371		180
370	372		(1) This chapter applies to a special deposit under an account agreement that states the
371	373		181
372	374		intention of the parties to establish a special deposit governed by this chapter, regardless
373	375		182
374	376		of whether a party to the account agreement or a transaction related to the special
375	377		183
376	378		deposit, or the special deposit itself, has a reasonable relation to this state.
377	379		184
378	380		(2) The parties to an account agreement may choose a forum in this state for settling a
379	381		185
380	382		dispute arising out of the special deposit, regardless of whether a party to the account
381	383		186
382	384		agreement or a transaction related to the special deposit, or the special deposit itself, has
383	385		187
384	386		a reasonable relation to this state.
385	387		188
386	388		(3) This chapter does not affect:
387	389		189
388	390		(a) a right or obligation relating to a deposit other than a special deposit under this
389	391		190
390	392		chapter; or
391	393		191
392	394		(b) the voidability of a deposit or transfer that is fraudulent or voidable under other law.
393	395		192
394	396		Section 4. Section 7-28-103 is enacted to read:
395	397		193
396	398		7-28-103 . Variation by agreement or amendment.
397	399		194
398	400		(1)(a) The effect of Sections 7-28-101 through 7-28-105, Sections 7-28-107 through
399	401		195
400	402		7-28-110, and Section 7-28-113 may not be varied by agreement, except as provided
401	403		196
402	404		in those sections.
403	405		197
404	406		(b) Subject to Subsection (2), the effect of Sections 7-28-106, 7-28-111, and 7-28-112
405		-	- 6 - Enrolled Copy S.B. 294
406	407		198
407	408		may be varied by agreement.
	409	+	- 6 - 03-07 22:21 2nd Sub. (Salmon) S.B. 294
408	410		199
409	411		(2) A provision in an account agreement or other record that substantially excuses liability
410	412		200
411	413		or substantially limits remedies for failure to perform an obligation under this chapter is
412	414		201
413	415		not sufficient to vary the effect of a provision of this chapter.
414	416		202
415	417		(3) If a beneficiary is a party to an account agreement, the bank and the depositor may
416	418		203
417	419		amend the agreement without the consent of the beneficiary only if the agreement
418	420		204
419	421		expressly permits the amendment.
420	422		205
421	423		(4) If a beneficiary is not a party to an account agreement and the bank and the depositor
422	424		206
423	425		know the beneficiary has knowledge of the agreement's terms, the bank and the
424	426		207
425	427		depositor may amend the agreement without the consent of the beneficiary only if the
426	428		208
427	429		amendment does not adversely and materially affect a payment right of the beneficiary.
428	430		209
429	431		(5) If a beneficiary is not a party to an account agreement and the bank and the depositor do
430	432		210
431	433		not know whether the beneficiary has knowledge of the agreement's terms, the bank and
432	434		211
433	435		the depositor may amend the agreement without the consent of the beneficiary only if
434	436		212
435	437		the amendment is made in good faith.
436	438		213
437	439		Section 5. Section 7-28-104 is enacted to read:
438	440		214
439	441		7-28-104 . Requirements for special deposit.
440	442		215
441	443		A deposit is a special deposit if the deposit is:
442	444		216
443	445		(1) a deposit of funds in a bank under an account agreement;
444	446		217
445	447		(2) for the benefit of at least two beneficiaries, one or more of which may be a depositor;
446	448		218
447	449		(3) denominated in a medium of exchange that is currently authorized or adopted by a
448	450		219
449	451		domestic or foreign government;
450	452		220
451	453		(4) for a permissible purpose stated in the account agreement; and
452	454		221
453	455		(5) subject to a contingency.
454	456		222
455	457		Section 6. Section 7-28-105 is enacted to read:
456	458		223
457	459		7-28-105 . Permissible purpose.
458	460		224
459	461		(1) A special deposit must serve at least one permissible purpose stated in the account
460	462		225
461	463		agreement from the time the special deposit is created in the account agreement until
462	464		226
463	465		termination of the special deposit.
464	466		227
465	467		(2) If, before termination of the special deposit, the bank or a court determines the special
466	468		228
467	469		deposit no longer satisfies Subsection (1), Sections 7-28-107 through 7-28-110 cease to
468	470		229
469	471		apply to any funds deposited in the special deposit after the special deposit ceases to
470	472		230
471	473		satisfy Subsection (1).
472	474		231
473	475		(3) If, before termination of a special deposit, the bank determines the special deposit no
474		-	- 7 - S.B. 294 Enrolled Copy
475	476		232
476	477		longer satisfies Subsection (1), the bank may take action the bank believes is necessary
	478	+	- 7 - 2nd Sub. (Salmon) S.B. 294 03-07 22:21
477	479		233
478	480		under the circumstances, including terminating the special deposit.
479	481		234
480	482		Section 7. Section 7-28-106 is enacted to read:
481	483		235
482	484		7-28-106 . Payment to beneficiary by bank.
483	485		236
484	486		(1) Unless the account agreement provides otherwise, the bank is obligated to pay a
485	487		237
486	488		beneficiary if there are sufficient actually and finally collected funds in the balance of
487	489		238
488	490		the special deposit.
489	491		239
490	492		(2) Except as provided in Subsection (3), the obligation to pay the beneficiary is excused if
491	493		240
492	494		the funds available in the special deposit are insufficient to cover such payment.
493	495		241
494	496		(3)(a) Unless the account agreement provides otherwise, if the funds available in the
495	497		242
496	498		special deposit are insufficient to cover an obligation to pay a beneficiary, a
497	499		243
498	500		beneficiary may elect to be paid the funds that are available or, if there is more than
499	501		244
500	502		one beneficiary, a pro rata share of the funds available.
501	503		245
502	504		(b) Payment to the beneficiary making the election under this Subsection (3) discharges
503	505		246
504	506		the bank's obligation to pay a beneficiary and does not constitute an accord and
505	507		247
506	508		satisfaction with respect to another person obligated to the beneficiary.
507	509		248
508	510		(4) Unless the account agreement provides otherwise, the obligation of the bank obligated
509	511		249
510	512		to pay a beneficiary is immediately due and payable.
511	513		250
512	514		(5) The bank may discharge the bank's obligation under this section by:
513	515		251
514	516		(a) crediting another transaction account of the beneficiary; or
515	517		252
516	518		(b) taking other action that:
517	519		253
518	520		(i) is permitted under the account agreement for the bank to obtain a discharge; or
519	521		254
520	522		(ii) otherwise would constitute a discharge under law.
521	523		255
522	524		(6) If the bank obligated to pay a beneficiary has incurred an obligation to discharge the
523	525		256
524	526		obligation of another person, the obligation of the other person is discharged if action by
525	527		257
526	528		the bank under Subsection (5) would constitute a discharge of the obligation of the other
527	529		258
528	530		person under law that determines whether an obligation is satisfied.
529	531		259
530	532		Section 8. Section 7-28-107 is enacted to read:
531	533		260
532	534		7-28-107 . Property interest of depositor or beneficiary.
533	535		261
534	536		(1) Neither a depositor nor a beneficiary has a property interest in a special deposit.
535	537		262
536	538		(2)(a) Any property interest with respect to a special deposit is only in the right to
537	539		263
538	540		receive payment if the bank is obligated to pay a beneficiary and not in the special
539	541		264
540	542		deposit itself.
541	543		265
542	544		(b) Any property interest under this Subsection (2) is determined under other law.
543		-	- 8 - Enrolled Copy S.B. 294
544	545		266
545	546		Section 9. Section 7-28-108 is enacted to read:
	547	+	- 8 - 03-07 22:21 2nd Sub. (Salmon) S.B. 294
546	548		267
547	549		7-28-108 . When creditor process enforceable against bank.
548	550		268
549	551		(1) Subject to Subsection (2), creditor process with respect to a special deposit is not
550	552		269
551	553		enforceable against the bank holding the special deposit.
552	554		270
553	555		(2) Creditor process is enforceable against the bank holding a special deposit with respect
554	556		271
555	557		to an amount the bank is obligated to pay a beneficiary or a depositor if the process:
556	558		272
557	559		(a) is served on the bank;
558	560		273
559	561		(b) provides sufficient information to permit the bank to identify the depositor or the
560	562		274
561	563		beneficiary from the bank's books and records; and
562	564		275
563	565		(c) gives the bank a reasonable opportunity to act on the process.
564	566		276
565	567		(3)(a) Creditor process served on a bank before the creditor process is enforceable
566	568		277
567	569		against the bank under Subsection (2) does not create a right of the creditor against
568	570		278
569	571		the bank or a duty of the bank to the creditor.
570	572		279
571	573		(b) Other law determines whether creditor process creates a lien enforceable against the
572	574		280
573	575		beneficiary on a contingent interest of a beneficiary, including a depositor as a
574	576		281
575	577		beneficiary, even if not enforceable against the bank.
576	578		282
577	579		Section 10. Section 7-28-109 is enacted to read:
578	580		283
579	581		7-28-109 . Injunction or similar relief.
580	582		284
581	583		A court may enjoin, or grant similar relief that would have the effect of enjoining, a
582	584		285
583	585		bank from paying a depositor or beneficiary only if payment would constitute a material fraud
584	586		286
585	587		or facilitate a material fraud with respect to a special deposit.
586	588		287
587	589		Section 11. Section 7-28-110 is enacted to read:
588	590		288
589	591		7-28-110 . Recoupment or set off.
590	592		289
591	593		(1) Except as provided in Subsection (2) or (3), a bank may not exercise a right of
592	594		290
593	595		recoupment or set off against a special deposit.
594	596		291
595	597		(2) An account agreement may authorize the bank to debit the special deposit:
596	598		292
597	599		(a) when the bank becomes obligated to pay a beneficiary, in an amount that does not
598	600		293
599	601		exceed the amount necessary to discharge the obligation;
600	602		294
601	603		(b) for a fee assessed by the bank that relates to an overdraft in the special deposit
602	604		295
603	605		account;
604	606		296
605	607		(c) for costs incurred by the bank that relate directly to the special deposit; or
606	608		297
607	609		(d) to reverse an earlier credit posted by the bank to the balance of the special deposit
608	610		298
609	611		account, if the reversal occurs under an event or circumstance warranted under other
610	612		299
611	613		law of this state governing mistake and restitution.
612		-	- 9 - S.B. 294 Enrolled Copy
613	614		300
614	615		(3) The bank holding a special deposit may exercise a right of recoupment or set off against
	616	+	- 9 - 2nd Sub. (Salmon) S.B. 294 03-07 22:21
615	617		301
616	618		an obligation to pay a beneficiary, even if the bank funds payment from the special
617	619		302
618	620		deposit.
619	621		303
620	622		Section 12. Section 7-28-111 is enacted to read:
621	623		304
622	624		7-28-111 . Duties and liability of bank.
623	625		305
624	626		(1) A bank does not have a fiduciary duty to any person with respect to a special deposit.
625	627		306
626	628		(2) When the bank holding a special deposit becomes obligated to pay a beneficiary, a
627	629		307
628	630		debtor-creditor relationship arises between the bank and beneficiary.
629	631		308
630	632		(3) The bank holding a special deposit has a duty to a beneficiary to comply with the
631	633		309
632	634		account agreement and this chapter.
633	635		310
634	636		(4)(a) If the bank holding a special deposit does not comply with the account agreement
635	637		311
636	638		or this chapter, the bank is liable to a depositor or beneficiary only for damages
637	639		312
638	640		proximately caused by the noncompliance.
639	641		313
640	642		(b) Except as provided by other law of this state, the bank is not liable for consequential,
641	643		314
642	644		special, or punitive damages.
643	645		315
644	646		(5) The bank holding a special deposit may rely on records presented in compliance with
645	647		316
646	648		the account agreement to determine whether the bank is obligated to pay a beneficiary.
647	649		317
648	650		(6)(a) If the account agreement requires payment on presentation of a record, the bank
649	651		318
650	652		shall determine within a reasonable time whether the record is sufficient to require
651	653		319
652	654		payment.
653	655		320
654	656		(b) If the agreement requires action by the bank on presentation of a record, the bank is
655	657		321
656	658		not liable for relying in good faith on the genuineness of the record if the record
657	659		322
658	660		appears on the record's face to be genuine.
659	661		323
660	662		(7) Unless the account agreement provides otherwise, the bank is not required to determine
661	663		324
662	664		whether a permissible purpose stated in the agreement continues to exist.
663	665		325
664	666		Section 13. Section 7-28-112 is enacted to read:
665	667		326
666	668		7-28-112 . Term and termination.
667	669		327
668	670		(1) Unless otherwise provided in the account agreement, a special deposit terminates five
669	671		328
670	672		years after the date the special deposit was first funded.
671	673		329
672	674		(2) Unless otherwise provided in the account agreement, if the bank cannot identify or
673	675		330
674	676		locate a beneficiary entitled to payment when the special deposit is terminated, and a
675	677		331
676	678		balance remains in the special deposit, the bank shall pay the balance to the depositor or
677	679		332
678	680		depositors as a beneficiary or beneficiaries.
679	681		333
680	682		(3) A bank that pays the remaining balance as provided under Subsection (2) has no further
681		-	- 10 - Enrolled Copy S.B. 294
682	683		334
683	684		obligation with respect to the special deposit.
	685	+	- 10 - 03-07 22:21 2nd Sub. (Salmon) S.B. 294
684	686		335
685	687		Section 14. Section 7-28-113 is enacted to read:
686	688		336
687	689		7-28-113 . Principles of law and equity.
688	690		337
689	691		Title 70A, Uniform Commercial Code, consumer protection law, law governing deposits
690	692		338
691	693		generally, law related to escheat and abandoned or unclaimed property, and the principles of
692	694		339
693	695		law and equity, including law related to capacity to contract, principal and agent, estoppel,
694	696		340
695	697		fraud, misrepresentation, duress, coercion, mistake, and bankruptcy, supplement this chapter
696	698		341
697	699		except to the extent inconsistent with this chapter.
698	700		342
699	701		Section 15. Section 7-28-114 is enacted to read:
700	702		343
701	703		7-28-114 . Uniformity of application and construction.
702	704		344
703	705		In applying and construing this uniform act, a court shall consider the promotion of
704	706		345
705	707		uniformity of the law among jurisdictions that enact this uniform act.
706	708		346
707	709		Section 16. Section 7-28-115 is enacted to read:
708	710		347
709	711		7-28-115 . Transitional provision.
710	712		348
711	713		This chapter applies to:
712	714		349
713	715		(1) a special deposit made under an account agreement executed on or after May 7, 2025;
714	716		350
715	717		and
716	718		351
717	719		(2) a deposit made under an agreement executed before May 7, 2025, if:
718	720		352
719	721		(a) all parties entitled to amend the agreement agree to make the deposit a special
720	722		353
721	723		deposit governed by this chapter; and
722	724		354
723	725		(b) the special deposit referenced in the amended agreement satisfies Section 7-28-104.
724	726		355
725	727		Section 17. Section 7-28-116 is enacted to read:
726	728		356
727	729		7-28-116 . Severability.
728	730		357
729	731		If a provision of this chapter or the chapter's application to a person or circumstance is
730	732		358
731	733		held invalid, the invalidity does not affect another provision or application that can be given
732	734		359
733	735		effect without the invalid provision.
734	736		360
735	737		Section 18. Section 70D-4-101 is enacted to read:
736	738		361
737		-
738		-	CHAPTER 4. UNIFORM MORTGAGE MODIFICATION ACT
	739	+	70D-4-101 . Definitions.
739	740		362
740		-	~~70D-4-101 . Definitions.~~
	741	+	(1) "Electronic" means relating to technology having electrical, digital, magnetic, wireless,
741	742		363
742		-	~~(1) "Electronic" means relating to technology having electrical~~, ~~digital~~, ~~magnetic, wireless,~~
	743	+	optical, electromagnetic, or similar capabilities.
743	744		364
744		-	~~optical, electromagnetic,~~ ~~or similar capabilities.~~
	745	+	(2) "Financial covenant" means an undertaking to demonstrate an obligor's creditworthiness
745	746		365
746		-	~~(2) "Financial~~ ~~covenant" means an undertaking to demonstrate~~ an obligor~~'s creditworthiness~~
	747	+	or the adequacy of security provided by an obligor.
747	748		366
748		-	~~or the adequacy of security provided by an obligor.~~
	749	+	(3) "Modification" includes change, amendment, revision, correction, addition,
749	750		367
750		-	(3) "Modification" includes change, amendment, revision, correction, addition,
751		-	- 11 - S.B. 294 Enrolled Copy
	751	+	supplementation, elimination, waiver, and restatement.
752	752		368
753		-	supplementation, elimination, waiver, and restatement.
	753	+	(4)(a) "Mortgage" means an agreement that creates a consensual interest in real property
	754	+	- 11 - 2nd Sub. (Salmon) S.B. 294 03-07 22:21
754	755		369
755		-	~~(4)(a) "Mortgage" means~~ an agreement ~~that creates a consensual interest in real property~~
	756	+	to secure payment or performance of an obligation regardless of how the agreement
756	757		370
757		-	~~to secure payment or performance~~ of ~~an obligation regardless of how the agreement~~
	758	+	is denominated, including a mortgage, deed of trust, trust deed, security deed,
758	759		371
759		-	~~is denominated~~, ~~including a mortgage,~~ deed of ~~trust, trust deed,~~ ~~security deed,~~
	760	+	indenture, or deed to secure debt, and regardless of whether the agreement also
760	761		372
761		-	~~indenture, or deed to secure debt,~~ ~~and regardless of whether the agreement also~~
	762	+	creates a security interest in personal property.
762	763		373
763		-	creates a ~~security~~ interest ~~in personal property.~~
	764	+	(b) "Mortgage" does not include an agreement that creates a consensual interest to
764	765		374
765		-	~~(b) "Mortgage" does not include an agreement that creates~~ a ~~consensual interest~~ to
	766	+	secure a liability owed by a unit owner to a condominium association, owners
766	767		375
767		-	~~secure a liability owed by a unit owner to a condominium~~ association, ~~owners~~
	768	+	association, or cooperative housing association for association dues, fees, or
768	769		376
769		-	~~association, or cooperative housing association for association dues, fees, or~~
	770	+	assessments.
770	771		377
771		-	~~assessments.~~
	772	+	(5) "Mortgage modification" means modification of:
772	773		378
773		-	(5) "Mortgage ~~modification" means modification of:~~
	774	+	(a) a mortgage;
774	775		379
775		-	(a) a ~~mortgage;~~
	776	+	(b) an agreement that creates an obligation, including a promissory note, loan
776	777		380
777		-	~~(b) an~~ agreement ~~that creates an obligation, including a promissory note, loan~~
	778	+	agreement, or credit agreement; or
778	779		381
779		-	agreement, or credit ~~agreement; or~~
	780	+	(c) an agreement that creates other security or credit enhancement for an obligation,
780	781		382
781		-	~~(c)~~ an ~~agreement that creates other security~~ or ~~credit enhancement for an obligation,~~
	782	+	including an assignment of leases or rents or a guaranty.
782	783		383
783		-	~~including an assignment of leases~~ or ~~rents~~ or a ~~guaranty~~.
	784	+	(6) "Obligation" means a debt or other duty or liability secured by a mortgage.
784	785		384
785		-	(6) "~~Obligation~~" means a ~~debt or other duty or liability secured by a mortgage.~~
	786	+	(7) "Obligor" means a person that:
786	787		385
787		-	(7) ~~"Obligor" means a person that:~~
	788	+	(a) owes payment or performance of an obligation;
788	789		386
789		-	(a) ~~owes payment~~ or ~~performance of an obligation;~~
	790	+	(b) signs a mortgage; or
790	791		387
791		-	(b) ~~signs a mortgage;~~ or
	792	+	(c) is otherwise accountable, or whose property serves as collateral, for payment or
792	793		388
793		-	~~(c) is otherwise accountable, or whose property serves as collateral, for payment or~~
	794	+	performance of an obligation.
794	795		389
795		-	~~performance of~~ an ~~obligation.~~
	796	+	(8) "Person" means an individual, estate, business or nonprofit entity, government or
796	797		390
797		-	~~(8) "Person" means an individual~~, ~~estate~~, ~~business~~ or ~~nonprofit~~ entity~~, government or~~
	798	+	governmental subdivision, agency, instrumentality, or other legal entity.
798	799		391
799		-	~~governmental subdivision,~~ ~~agency, instrumentality,~~ ~~or other legal entity.~~
	800	+	(9) "Recognized index" means an index to which changes in the interest rate may be linked
800	801		392
801		-	~~(9) "Recognized~~ ~~index" means an index~~ to ~~which changes in~~ the ~~interest rate may be linked~~
	802	+	that is readily available to, and verifiable by, the obligor and is beyond the control of the
802	803		393
803		-	~~that~~ is ~~readily available to, and verifiable by, the obligor and is beyond the control of the~~
	804	+	person to whom the obligation is owed.
804	805		394
805		-	~~person to whom the obligation is owed.~~
	806	+	(10) "Record" means information:
806	807		395
807		-	(10) ~~"Record" means information:~~
	808	+	(a) inscribed on a tangible medium; or
808	809		396
809		-	(a) ~~inscribed on a tangible~~ medium~~; or~~
	810	+	(b) stored in an electronic or other medium and retrievable in perceivable form.
810	811		397
811		-	(b) ~~stored in an electronic~~ or ~~other medium and retrievable in perceivable form.~~
	812	+	(11) "Sign" means, with present intent to authenticate or adopt a record:
812	813		398
813		-	(11) ~~"Sign" means, with present intent~~ to ~~authenticate~~ or adopt a ~~record:~~
	814	+	(a) to execute or adopt a tangible symbol; or
814	815		399
815		-	(a) to ~~execute~~ or ~~adopt a tangible~~ symbol; or
	816	+	(b) to attach to or logically associate with the record an electronic symbol, sound, or
816	817		400
817		-	~~(b) to attach to or logically associate with the record an electronic symbol, sound, or~~
	818	+	process.
818	819		401
819		-	process.
820		-	- 12 - Enrolled Copy S.B. 294
	820	+	Section 19. Section 70D-4-201 is enacted to read:
821	821		402
822		-	Section 19. Section 70D-4-201 is enacted to read:
	822	+	70D-4-201 . Scope.
	823	+	- 12 - 03-07 22:21 2nd Sub. (Salmon) S.B. 294
823	824		403
824		-	~~70D-4-201~~ . ~~Scope.~~
	825	+	(1) Except as provided in Subsection (3), this chapter applies to a mortgage modification.
825	826		404
826		-	(1) ~~Except as provided in Subsection (3),~~ this chapter ~~applies to a mortgage modification.~~
	827	+	(2) This chapter does not affect the following law of this state:
827	828		405
828		-	(2) ~~This chapter does not affect~~ the ~~following law~~ of ~~this state:~~
	829	+	(a) law governing the required content of a mortgage;
829	830		406
830		-	(a) law governing the ~~required content~~ of a ~~mortgage;~~
	831	+	(b) a statute of limitations or other law governing the expiration or termination of a right
831	832		407
832		-	~~(b)~~ a ~~statute of limitations or other law governing the expiration or termination of a right~~
	833	+	to enforce an obligation or a mortgage;
833	834		408
834		-	~~to enforce an obligation or~~ a ~~mortgage~~;
	835	+	(c) a recording statute;
835	836		409
836		-	(c) a ~~recording statute~~;
	837	+	(d) a statute governing the priority of a tax lien or other governmental lien;
837	838		410
838		-	(d) a statute ~~governing the priority~~ of ~~a tax lien~~ or ~~other governmental lien;~~
	839	+	(e) a statute of frauds; or
839	840		411
840		-	(e) ~~a statute~~ of ~~frauds; or~~
	841	+	(f) except as provided in Subsection 70D-4-301(2)(h), law governing the priority of a
841	842		412
842		-	~~(f) except as provided in Subsection 70D-4-301(2)(h), law governing the priority of a~~
	843	+	future advance.
843	844		413
844		-	~~future advance.~~
	845	+	(3) This chapter does not apply to:
845	846		414
846		-	(3) ~~This chapter does not apply~~ to:
	847	+	(a) a release of, or addition to, property encumbered by a mortgage;
847	848		415
848		-	(a) a release of, or ~~addition to,~~ ~~property encumbered by a mortgage;~~
	849	+	(b) a release of, addition of, or other change in an obligor; or
849	850		416
850		-	(b) ~~a release of, addition of,~~ or other ~~change in~~ an ~~obligor; or~~
	851	+	(c) an assignment or other transfer of a mortgage or an obligation.
851	852		417
852		-	~~(c) an assignment or other transfer of a mortgage or an obligation.~~
	853	+	Section 20. Section 70D-4-301 is enacted to read:
853	854		418
854		-	~~Section 20. Section~~ 70D-4-301 ~~is enacted to read:~~
	855	+	70D-4-301 . Effect of mortgage modification.
855	856		419
856		-	~~70D-4-301 . Effect of~~ mortgage modification.
	857	+	(1) For a mortgage modification described in Subsection (2):
857	858		420
858		-	(1) ~~For a~~ mortgage ~~modification described in Subsection (2):~~
	859	+	(a) the mortgage continues to secure the obligation as modified;
859	860		421
860		-	(a) the mortgage ~~continues to secure~~ the ~~obligation as modified~~;
	861	+	(b) the priority of the mortgage is not affected by the modification;
861	862		422
862		-	(b) ~~the priority of~~ the mortgage ~~is not affected by~~ the ~~modification;~~
	863	+	(c) the mortgage retains the mortgage's priority regardless of whether a record of the
863	864		423
864		-	~~(c) the~~ mortgage ~~retains the mortgage's priority regardless of whether a record of the~~
	865	+	mortgage modification is recorded; and
865	866		424
866		-	~~mortgage~~ modification is ~~recorded; and~~
	867	+	(d) the modification is not a novation.
867	868		425
868		-	(d) the ~~modification is not a novation.~~
	869	+	(2) Subsection (1) applies to one or more of the following:
869	870		426
870		-	(2) ~~Subsection (1) applies to one or more~~ of the ~~following:~~
	871	+	(a) an extension of the maturity date of an obligation;
871	872		427
872		-	(a) ~~an extension of~~ the ~~maturity date~~ of an obligation;
	873	+	(b) a decrease in the interest rate of an obligation;
873	874		428
874		-	(b) ~~a decrease~~ in ~~the interest rate of an obligation;~~
	875	+	(c) if there is any change as specified in Subsection (2)(c)(i) through (iv) that does not
875	876		429
876		-	~~(c) if there is any change~~ as ~~specified in Subsection (2)(c)(i) through (iv) that does not~~
	877	+	result in an increase in the interest rate as calculated on the date the modification
877	878		430
878		-	~~result in an increase in the interest rate as calculated on the date the modification~~
	879	+	becomes effective:
879	880		431
880		-	~~becomes effective:~~
	881	+	(i) a change to a different recognized index if the previous index is no longer
881	882		432
882		-	~~(i) a change to a different recognized index if the previous index is no longer~~
	883	+	available;
883	884		433
884		-	~~available~~;
	885	+	(ii) a change in the differential between the index and the interest rate;
885	886		434
886		-	(ii) a change ~~in the differential between the index and the interest~~ rate;
	887	+	(iii) a change from a floating or adjustable rate to a fixed rate; and
887	888		435
888		-	(iii) a change from a floating or adjustable rate to a fixed rate; and
889		-	- 13 - S.B. 294 Enrolled Copy
	889	+	(iv) a change from a fixed rate to a floating or adjustable rate based on a recognized
890	890		436
891		-	(iv) a change from a fixed rate to a floating or adjustable rate based on a recognized
	891	+	index;
	892	+	- 13 - 2nd Sub. (Salmon) S.B. 294 03-07 22:21
892	893		437
893		-	~~index~~;
	894	+	(d) a capitalization of unpaid interest or other unpaid obligation;
894	895		438
895		-	(d) a ~~capitalization of unpaid interest~~ or other ~~unpaid obligation;~~
	896	+	(e) a forgiveness, forbearance, or other reduction of principal, accrued interest, or other
896	897		439
897		-	~~(e) a forgiveness, forbearance, or other reduction of principal, accrued interest, or other~~
	898	+	monetary obligation;
898	899		440
899		-	~~monetary obligation;~~
	900	+	(f) a modification of a requirement for maintaining an escrow or reserve account for
900	901		441
901		-	~~(f) a modification~~ of ~~a requirement for maintaining~~ an ~~escrow~~ or ~~reserve account for~~
	902	+	payment of an obligation, including taxes, insurance premiums, or another obligation;
902	903		442
903		-	~~payment~~ of ~~an obligation,~~ ~~including taxes, insurance premiums,~~ or ~~another obligation~~;
	904	+	(g) a modification of a requirement for acquiring or maintaining insurance;
904	905		443
905		-	(g) a modification of ~~a requirement for acquiring or maintaining insurance~~;
	906	+	(h) a modification of an existing condition to advance funds;
906	907		444
907		-	(h) a modification of ~~an existing condition to advance funds;~~
	908	+	(i) a modification of a financial covenant; and
908	909		445
909		-	(i) a modification of ~~a financial covenant;~~ ~~and~~
	910	+	(j) a modification of the payment amount or schedule resulting from another
910	911		446
911		-	~~(j) a~~ modification ~~of the payment amount or schedule resulting from another~~
	912	+	modification described in this Subsection (2).
912	913		447
913		-	modification described in ~~this~~ Subsection (2).
	914	+	(3) The effect of a mortgage modification not described in Subsection (2) is governed by
914	915		448
915		-	~~(3) The effect of a mortgage modification not described in Subsection (2) is governed by~~
	916	+	other law.
916	917		449
917		-	~~other law~~.
	918	+	Section 21. Section 70D-4-401 is enacted to read:
918	919		450
919		-	~~Section 21. Section~~ 70D-4-401 ~~is enacted to read:~~
	920	+	70D-4-401 . Uniformity of application and construction.
920	921		451
921		-	~~70D-4-401 . Uniformity of application~~ and ~~construction.~~
	922	+	In applying and construing this uniform act, a court shall consider the promotion of
922	923		452
923		-	~~In applying and construing this uniform act, a court shall consider~~ the ~~promotion of~~
	924	+	uniformity of the law among jurisdictions that enact it.
924	925		453
925		-	~~uniformity of the law among jurisdictions that enact it.~~
	926	+	Section 22. Section 70D-4-501 is enacted to read:
926	927		454
927		-	~~Section 22. Section~~ 70D-4-501 ~~is enacted~~ to ~~read:~~
	928	+	70D-4-501 . Relation to Electronic Signatures in Global and National Commerce
928	929		455
929		-	~~70D-4-501~~ . ~~Relation to Electronic Signatures in Global and National Commerce~~
	930	+	Act.
930	931		456
931		-	~~Act.~~
	932	+	This chapter modifies, limits, or supersedes the Electronic Signatures in Global and
932	933		457
933		-	~~This chapter modifies~~, ~~limits~~, or ~~supersedes the Electronic Signatures in Global and~~
	934	+	National Commerce Act, 15 U.S.C. Sec. 7001 et seq. , but does not modify, limit, or supersede
934	935		458
935		-	~~National Commerce Act,~~ 15 U.S.C. Sec. 7001 ~~et seq., but does not modify, limit~~, or ~~supersede~~
	936	+	15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the notices described in 15
936	937		459
937		-	15 U.S.C. Sec. ~~7001~~(c)~~, or authorize electronic delivery of any of the notices described in 15~~
	938	+	U.S.C. Sec. 7003(b).
938	939		460
939		-	~~U.S.C~~. ~~Sec. 7003(b).~~
	940	+	Section 23. Section 70D-4-601 is enacted to read:
940	941		461
941		-	~~Section 23. Section~~ 70D-4-601 ~~is enacted to read:~~
	942	+	70D-4-601 . Transitional Provision.
942	943		462
943		-	~~70D-4-601 . Transitional Provision.~~
	944	+	This chapter applies to a mortgage modification made on or after May 7, 2025,
944	945		463
945		-	~~This chapter applies to a~~ mortgage ~~modification made on~~ or ~~after May 7,~~ ~~2025,~~
	946	+	regardless of when the mortgage or the obligation was created.
946	947		464
947		-	~~regardless of when the mortgage or the obligation was created~~.
	948	+	Section 24. Effective Date.
948	949		465
949		-	Section 24. Effective Date.
950		-	466
951	950		This bill takes effect on May 7, 2025.
952	951		- 14 -