NY State Senate Bill 2023-S9477

Current Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 15, 2024	referred to banks

2023-S9477 (ACTIVE) - Details

See Assembly Version of this Bill:: A1578
Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Add §675-a, Bank L
Versions Introduced in 2021-2022 Legislative Session:: S6949, A8002

2023-S9477 (ACTIVE) - Summary

Provides for joint and survivorship accounts; provides that absent indication to the contrary, funds remaining in such an account upon the death of the depositor shall be deemed part of the depositor's estate.

2023-S9477 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9477

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the banking law, in relation to establishing joint and
survivorship accounts

 
SUMMARY OF PROVISIONS:

Section 1. Amends the banking law by adding section 675-a, which deline-
ates the parameters of joint accounts, joint and survivorship accounts,
regulations of the superintendent, and the bill's application.

Section 2: Amends section 675 of the banking law by adding a new subdi-
vision (d) which establishes that the amended provisions to the bill
only apply to accounts opened prior to the effective date of section
675-a

Section 3: Repeals section 678 of the banking law.

Section 4: Renumbers section 679 of the banking law to section 678 and
amends section 678 to add joint and survivorship accounts to the public

awareness campaign.

Section 5: Sets the effective date.

 
JUSTIFICATION:

Many individuals, especially the elderly, want to have a bank account
which can be drawn upon by another person in addition to the depositor.
Currently, such depositors in New York banks are virtually always
offered, and establish, a Joint Account under § 675 of the New York
Banking Law.

Under 675 the establishment of such an account is presumptively consid-
ered to create a "Joint Tenancy", which means that it creates two
presumptions: (1) that upon the creation of the account there has been
an irrevocable gift of one-half of the account to the other depositor,
and (2) that upon the death of one of them the balance on deposit vests
in the survivor. Such depositors, however, normally do not realize or
intend that opening such an account results in a gift of one-half of the
account to such other person. And, depending on their family situation
and their overall testamentary plans, they may or may not intend survi-
vorship, i.e., that such other person receive all the remaining funds if
the depositor dies first. This conflict has led to substantial liti-
gation.

In an attempt to remedy this issue "Convenience Accounts" were estab-
lished. Under a Convenience Account the depositor and another person can
withdraw funds for the depositor's benefit, while at the same time
ownership of the funds remains in the depositor and, on the depositor's
death, in the depositor's estate.

Unfortunately, New York depositors are rarely offered these Convenience
Accounts. Employees of New York banking institutions are often not even
aware of the availability of such accounts. This legislation will clari-
fy the property issues as between the depositor and the other person
with respect to the funds in the joint account, and thereby to eliminate
the unnecessary litigation over the question of the depositor's true
intention on those issues, and to clarify and eliminate the need for
litigation without in any way removing the present protections of the
New York banking institutions with respect to payment of the deposited
funds.

 
PRIOR LEGISLATIVE HISTORY:

2021-22: S. 6949 Passed Senate/ A. 8002 Referred to Banks

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This bill shall take effect on the thirtieth day after it shall have
become a law.

2023-S9477 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9477
 
                             I N  S E N A T E
 
                               May 15, 2024
                                ___________
 
 Introduced  by  Sen.  COONEY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT to amend the banking law, in relation to establishing  joint  and
   survivorship accounts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The banking law is amended by adding a new section 675-a to
 read as follows:
   § 675-A. JOINT ACCOUNTS; JOINT AND SURVIVORSHIP ACCOUNTS.  1.    JOINT
 ACCOUNTS.  (A) WHEN A DEPOSIT OF CASH, SECURITIES, OR OTHER PROPERTY HAS
 BEEN MADE OR SHALL HEREAFTER BE MADE IN OR WITH ANY BANKING ORGANIZATION
 OR FOREIGN BANKING CORPORATION TRANSACTING BUSINESS IN  THIS  STATE,  OR
 SHARES  SHALL  HAVE BEEN ALREADY ISSUED OR SHALL BE HEREAFTER ISSUED, IN
 ANY SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION TRANSACTING BUSINESS IN
 THIS STATE, IN THE NAME OF SUCH DEPOSITOR  OR  SHAREHOLDER  AND  ANOTHER
 PERSON AND IN FORM TO BE PAID OR DELIVERED TO EITHER, OR THE SURVIVOR OF
 THEM, SUCH DEPOSIT OR SHARES AND ANY ADDITIONS THERETO OR ACCRUALS THER-
 EON  MAY BE PAID OR DELIVERED TO EITHER DURING THE LIFETIME OF BOTH, AND
 SUCH PAYMENT OR DELIVERY AND THE RECEIPT OR ACQUITTANCE OF  THE  ONE  TO
 WHOM  SUCH  PAYMENT OR DELIVERY IS MADE, SHALL BE A VALID AND SUFFICIENT
 RELEASE AND DISCHARGE TO THE BANKING ORGANIZATION FOR  ALL  PAYMENTS  OR
 DELIVERIES  MADE  ON  ACCOUNT  OF  SUCH  DEPOSIT  OR SHARES PRIOR TO THE
 RECEIPT BY THE BANKING ORGANIZATION  OF  NOTICE  IN  WRITING  SIGNED  BY
 EITHER ONE OF SUCH PERSONS, NOT TO PAY OR DELIVER SUCH DEPOSIT OR SHARES
 AND  THE  ADDITIONS  AND  ACCRUALS  THEREON IN ACCORDANCE WITH THE TERMS
 THEREOF, AND AFTER RECEIPT OF ANY SUCH NOTICE, THE BANKING  ORGANIZATION
 MAY  REQUIRE  THE  RECEIPT  OR  ACQUITTANCE OF BOTH SUCH PERSONS FOR ANY
 FURTHER PAYMENTS OR DELIVERY.
   (B) TITLE TO THE PROPERTY ON DEPOSIT IN AN ACCOUNT DESCRIBED IN  PARA-
 GRAPH  (A)  OF  THIS SUBDIVISION OR TO THE SHARES ISSUED AS DESCRIBED IN
 PARAGRAPH (A) OF THIS SUBDIVISION IS SOLELY IN THE DEPOSITOR  NO  MATTER
 THE  SOURCE  OF THE PROPERTY ON DEPOSIT OR USED TO ACQUIRE THE SHARES OR
 WHEN THE PROPERTY WAS DEPOSITED OR THE SHARES ACQUIRED.
   (C) ON THE DEATH OF THE OTHER PERSON DURING THE LIFETIME OF THE DEPOS-
 ITOR THE PAYMENT OR DELIVERY TO THE DEPOSITOR OF ANY OR ALL OF THE FUNDS
 REMAINING IN THE ACCOUNT SHALL BE A VALID AND SUFFICIENT RELEASE TO  THE
 BANKING ORGANIZATION.

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01238-02-3
 S. 9477                             2
 
   (D)  ON  THE  DEATH  OF THE DEPOSITOR DURING THE LIFETIME OF THE OTHER
 PERSON, THE BANKING ORGANIZATION SHALL DELIVER THE  FUNDS  REMAINING  IN
 THE  ACCOUNT IN ACCORD WITH THE CONTRACT, SIGNATURE CARD, OR OTHER DOCU-
 MENT BETWEEN THE BANKING ORGANIZATION AND THE  DEPOSITOR  GOVERNING  THE
 ACCOUNT,  WHICH  CONTRACT,    SIGNATURE  CARD, OR OTHER DOCUMENT   SHALL
 INCLUDE A PROVISION GOVERNING THE DISPOSITION OF THE FUNDS REMAINING  IN
 THE ACCOUNT ON THE DEATH OF THE DEPOSITOR WHICH SHALL BE IN SUBSTANTIAL-
 LY THE FOLLOWING FORM:
   ON  THE DEATH OF THE DEPOSITOR, {NAME}, THE FUNDS IN THE ACCOUNT SHALL
 BE DISPOSED OF AS FOLLOWS (SELECT ONE AND INITIAL):
   AS PART OF THE ESTATE OF THE DEPOSITOR,  {NAME}.  (THE  ACCOUNT  IS  A
 CONVENIENCE ACCOUNT)
   TO THE OTHER PERSON, {NAME}. (THE ACCOUNT IS A SURVIVORSHIP ACCOUNT)
   (E)  IF  THE  CONTRACT,  SIGNATURE  CARD,  OR  OTHER DOCUMENT DOES NOT
 INCLUDE SUCH A PROVISION OR IF IT DOES AND THE DEPOSITOR DID NOT  SELECT
 ONE  OR THE ALTERNATIVE THE FUNDS REMAINING IN THE ACCOUNT AT THE DEPOS-
 ITOR'S DEATH SHALL BE PART OF THE DEPOSITOR'S ESTATE.
   2.  CONVENIENCE ACCOUNTS. IF THE DEPOSITOR HAS DESIGNATED  THE  INTEN-
 TION  OR  IT  IS  CONCLUSIVELY PRESUMED THAT THE REMAINING FUNDS PASS AS
 PART OF THE DEPOSITOR'S ESTATE, (A) PAYMENT OR  DELIVERY  TO  THE  OTHER
 PERSON  OF  ANY OR ALL OF THE FUNDS REMAINING IN THE ACCOUNT SHALL STILL
 BE A VALID AND SUFFICIENT RELEASE TO THE BANKING  ORGANIZATION  IF  MADE
 PRIOR  TO  THE  RECEIPT BY THE BANKING ORGANIZATION OF WRITTEN NOTICE OF
 THE DEPOSITOR'S DEATH, AND (B) A BANKING ORGANIZATION  WHICH,  PRIOR  TO
 SERVICE  UPON IT OF A RESTRAINING ORDER, INJUNCTION OR OTHER APPROPRIATE
 PROCESS FROM A COURT  OF  COMPETENT  JURISDICTION  PROHIBITING  PAYMENT,
 MAKES  PAYMENT  TO THE EXECUTOR, ADMINISTRATOR OR OTHER QUALIFIED REPRE-
 SENTATIVE OF THE DECEASED DEPOSITOR'S ESTATE, SHALL, TO  THE  EXTENT  OF
 SUCH  PAYMENT, BE RELEASED FROM LIABILITY TO ANY PERSON CLAIMING A RIGHT
 TO THE FUNDS AND THE RECEIPT OR ACQUITTANCE OF THE EXECUTOR, ADMINISTRA-
 TOR OR QUALIFIED REPRESENTATIVE TO WHOM PAYMENT IS MADE SHALL BE A VALID
 AND SUFFICIENT RELEASE AND DISCHARGE OF THE BANKING ORGANIZATION.
   3. SURVIVORSHIP ACCOUNTS. IF THE DEPOSITOR HAS INDICATED THE INTENTION
 THAT THE REMAINING FUNDS PASS TO THE OTHER PERSON BY RIGHT OF  SURVIVOR-
 SHIP, PAYMENT OR DELIVERY TO THE OTHER PERSON OF ANY OR ALL OF THE FUNDS
 REMAINING  IN THE ACCOUNT SHALL BE A VALID AND SUFFICIENT RELEASE TO THE
 BANKING ORGANIZATION IF MADE PRIOR TO SERVICE UPON IT OF  A  RESTRAINING
 ORDER, INJUNCTION OR OTHER APPROPRIATE PROCESS FROM A COURT OF COMPETENT
 JURISDICTION PROHIBITING SUCH PAYMENT.
   4. REGULATIONS OF THE SUPERINTENDENT. THE SUPERINTENDENT SHALL PROMUL-
 GATE AND MAY FROM TIME TO TIME AMEND RULES AND REGULATIONS WHICH REQUIRE
 THAT  THE DEPOSITOR OF A JOINT ACCOUNT UNDER THIS SECTION BE INFORMED OF
 THE TERMS AND CONDITIONS OF THE ACCOUNT, INCLUDING THE RELATIONSHIP  AND
 CONSEQUENCES BETWEEN THE PARTIES IN THE ACCOUNT AND THE RESPONSIBILITIES
 OF THE INSTITUTION WITH WHICH THE ACCOUNT IS ESTABLISHED.
   5.  APPLICATION. (A) THIS SUBDIVISION OR ANY RULE OR REGULATION THERE-
 UNDER SHALL NOT BE DEEMED OR CONSTRUED AS INCREASING OR DIMINISHING  THE
 RIGHTS OR LIABILITY OF ANY PERSON OR ENTITY.
   (B) THE PROVISIONS OF THIS SECTION SHALL APPLY TO ACCOUNTS ESTABLISHED
 ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION.
   §  2.   This act shall take effect on the thirtieth day after it shall
 have become a law.    Effective  immediately,  the  addition,  amendment
 and/or repeal of any rule or regulation necessary for the implementation
 of  this  act  on  its  effective  date  are  authorized  to be made and
 completed on or before such effective date.

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Senate Bill S9477

Sponsored By

Current Bill Status - In Senate Committee Banks Committee

2023-S9477 (ACTIVE) - Details

2023-S9477 (ACTIVE) - Summary

2023-S9477 (ACTIVE) - Sponsor Memo

2023-S9477 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S9477

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Sponsored By

Jeremy A. Cooney

Current Bill Status - In Senate Committee Banks Committee

2023-S9477 (ACTIVE) - Details

2023-S9477 (ACTIVE) - Summary

2023-S9477 (ACTIVE) - Sponsor Memo

2023-S9477 (ACTIVE) - Bill Text download pdf

Comments