HOUSE BILL REPORT

SSB 5340

BYSenate Committee on Financial Institutions & Insurance (originally sponsored by Senators Warnke, Smitherman and Johnson)

Regulating disbursements by escrow agents.

House Committe on Financial Institutions & Insurance

Majority Report:  Do pass as amended.  (14)

      Signed by Representatives Dellwo, Chair; Zellinsky, Vice Chair; Chandler, Ranking Republican Member; Baugher, Beck, Crane, Day, Dorn, Inslee, P. King, Nutley, Schmidt, K. Wilson and Winsley.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE FEBRUARY 26, 1990

BACKGROUND:

An escrow agent may not disburse funds from an escrow account until the agent receives deposits into the account in the same amount as the disbursement.  Under certain circumstances, a disbursement covered by a check may be made before the check has been cleared.

SUMMARY:

An escrow agent shall not make disbursements until the next business day after the business day on which the funds are deposited, unless the deposit is made in cash, by interbank electronic transfer, or in a form that permits conversion of the deposit to cash on the same day the deposit is made.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Dean Morgan, Escrow Association of Washington; Dee McComb, Escrow Association of Washington; and Bob Mitchell, Department of Licensing.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    Disbursements from an escrow account which has been funded by deposit of a check or draft can be delayed until the check or draft has been sent for collection and cleared.  This measure will prevent the disbursement of funds from an escrow account until there has been time to determine whether a check or draft has cleared a bank.

House Committee - Testimony Against:      None.

VOTE ON FINAL PASSAGE:

      Yeas 96; Excused 2 - 2/26

Excused:    Representatives Chandler and P. King