On January 1, 2026 New York’s enactment of the Uniform Special Deposits Act (the “Act”) promulgated by the Uniform Law Commission, codified as Sections 680 to 680-p of new Article XIII-F of the Banking Law, became effective.
As described in the report prepared by the New York City Bar Association endorsing its enactment, available at https://www.nycbar.org/reports/memo-in-support-of-the-uniform-special-deposits-act/?back=1, and as summarized in this advisory, the Act provides statutory recognition and protections for “special deposits”, a type of bank account to be used for, among other things, security deposits and escrows. The Act provides useful clarity and certainty for such accounts. A deposit that meets the statutory requirements under the Act is protected from interference by the depositor and any beneficiary of the special deposit, or any of their creditors or successors, until the contingency triggering the disbursement of the funds is met.
Author:
James Gadsden, Partner
gadsden@clm.com