H-4129              _______________________________________________

                                                   HOUSE BILL NO. 1642

                        _______________________________________________

State of Washington                              50th Legislature                              1988 Regular Session

By Representatives Chandler, Day, Winsley and Crane

Read first time 1/20/88 and referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to escrow; and amending RCW 18.44.070.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 7, chapter 153, Laws of 1965 as amended by section 6, chapter 156, Laws of 1977 ex. sess. and RCW 18.44.070 are each amended to read as follows:

          Every certificated escrow agent shall keep adequate records of all transactions handled by or through ((him)) the agent including itemization of all receipts and disbursements of each transaction, which records shall be open to inspection by the director or ((his)) the director's authorized representatives.

          Every certificated agent shall keep a separate escrow fund account in a recognized Washington state depositary authorized to receive funds, in which shall be kept separate and apart and segregated from the agent's own funds, all funds or moneys of clients which are being held by the agent pending the closing of a transaction and such funds shall be deposited not later than the first banking day following receipt thereof.

An escrow agent, unless exempted by RCW 18.44.020(2), shall not make disbursements on any escrow account without first receiving deposits directly relating to the account in amounts at least equal to the disbursements.  The deposits shall be in one of the following forms:

(1) Cash;

(2) Interbank electronic transfers such that the funds are unconditionally received by the escrow agent or the agent's depository;

(3) Checks, negotiable orders of withdrawal, money orders, cashier's checks, and certified checks that are payable in Washington state and drawn on financial institutions located in Washington state; or

(4) Checks, negotiable orders of withdrawal, money orders, and any other item that has been finally paid as described in RCW 62A.4-213 prior to any disbursement;

(5) The word "item" means any instrument for the payment of money even though it is not negotiable, but does not include money.

          Violation of this section shall subject an escrow agent to penalties as prescribed in Title 9A RCW and remedies as provided in chapter 19.86 RCW and shall constitute grounds for suspension or revocation of the registration or license of any ((person under this chapter and such additional penalties as may be prescribed in Title 9A RCW)) certificated escrow agent.