Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Judiciary Committee |
SB 6218
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Title: An act relating to escrow licensing requirement exceptions.
Brief Description: Concerning escrow licensing requirement exceptions relating to the practice of law.
Sponsors: Senators Frockt, Chase, Kline, Harper, Pflug and Hobbs; by request of Washington State Bar Association.
Brief Summary of Bill |
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Hearing Date: 2/15/12
Staff: Trudes Tango (786-7384).
Background:
Generally, persons providing escrow services must be licensed as escrow agents by the Department of Financial Institutions.
A person licensed to practice law in Washington is exempt from the escrow licensing requirements while engaged in the performance of his or her professional duties. This exemption applies only when no separate compensation or gain is received for escrow services and the service is provided by the same legal entity as the law practice. An attorney who is principally engaged as an escrow agent, or holding himself or herself out publicly as being able to perform escrow services, must be licensed.
The Rules of Professional Conduct (RPC), adopted by the Washington Supreme Court, govern the conduct of attorneys. RPC 1.15A requires that escrow and other funds held by an attorney incident to the closing of any real estate transaction must be maintained in an interest-bearing trust account while in the attorney's possession. The RPCs impose on the attorney certain record-keeping and disbursement requirements.
Summary of Bill:
A person licensed to practice law in Washington is exempt from the escrow licensing requirements if:
all escrow transactions are performed by the attorney while engaged in the practice of law, or by an employee of the law practice under direct supervision of the attorney while engaged in the practice of law;
all escrow transactions are performed under a legal entity publicly identified and operated as a law practice; and
all escrow funds are deposited into, maintained in, and disbursed from a trust account in compliance with the state supreme court's rules governing the conduct of lawyers.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.