S-4711               _______________________________________________

                                         SUBSTITUTE SENATE BILL NO. 5340

                        _______________________________________________

State of Washington                               51st Legislature                              1990 Regular Session

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

Read first time 2/2/90.

AN ACT Relating to depository checks; 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 last amended by section 1, chapter 178, Laws of 1988 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 the agent including itemization of all receipts and disbursements of each transaction, which records shall be open to inspection by the director or 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.  An escrow agent shall not make disbursements until the next business day after the business day on which the funds are deposited, other than from funds deposited by interbank electronic transfers.  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 before any disbursement; or

          (5) Any depository check, including any cashier's check, certified check, or teller's check, which is governed by the provisions of the Federal Expedited Funds Availability Act, 12 U.S.C. ((400/[Sec. 4001])) Sec. 4001 et seq.

!ixThe 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 certified escrow agent.