WeVote
Log In

Bill

BH

Bill

LB 231

Adopt the Uniform Special Deposits Act

109th Legislature (2025-2026) Introduced by Bob Hallstrom

Opt-in act establishes a uniform framework for special deposits (escrow, earnest money, margins) to clarify beneficiaries' rights and treatment in bankruptcy and creditor actions.

Approved by Governor on March 11, 2025
0
WeVote Research Nonpartisan
Bill Summary · LB 231

LB 231 — Uniform Special Deposits Act

Status: Approved by Governor March 11, 2025 (Passed Final Reading 48–0–1)

Purpose / Intent

LB 231 adopts the Uniform Special Deposits Act to create a clear, uniform legal framework for “special deposits” held by banks and other financial institutions. The goal is to reduce uncertainty about how such deposits are treated (including in bankruptcy and creditor proceedings) and to enable commercial parties to use special deposits (for example, earnest money, escrowed funds, or margin) with greater confidence. The statute is expressly “opt‑in”: it applies only when an account agreement states the parties’ intention to establish a special deposit governed by the Act.

Key provisions and definitions

  • Sections: The Act is codified as the Uniform Special Deposits Act (sections 1–16).
  • Opt‑in account agreement: A special deposit exists only under an account agreement in a record that (a) is between a financial institution and one or more depositors, (b) may include beneficiaries, and (c) states intent to be governed by the Act.
  • “Financial institution”: Broadly defined to include banks, savings banks, savings and loan associations, building & loan associations, credit unions, trust companies, entities covered by federal deposit insurance, and a “digital asset depository that is not a digital asset depository institution” (final text).
  • “Special deposit”: A deposit that meets the statutory criteria (e.g., deposit of funds for the benefit of two or more beneficiaries, denominated in government‑authorized medium of exchange, and held for a permissible purpose).
  • Beneficiary rights: Establishes that beneficiaries can have a definite right to payment upon occurrence of a contingency and knowledge by the financial institution; such rights may be assignable and pledgeable.
  • Creditor process & bankruptcy: Clarifies how creditor processes (attachment, garnishment, levies, liens, etc.) and the bankruptcy of a depositor affect special deposits.
  • Setoff/recoupment: Clarifies when a financial institution may exercise setoff or recoupment against a special deposit, including limits where the deposit is unrelated to the underlying obligation to a beneficiary.
  • Contractual variation and amendments: Certain core provisions (sections 2–6, 8–11, 14) are non‑varying by agreement; other sections may be varied except that provisions that substantially excuse liability or limit remedies cannot override the Act. Rules govern when financial institution and depositor may amend agreements without beneficiary consent (depends on whether beneficiary is a party, knows the terms, or whether amendments are made in good faith).
  • Choice of forum: Parties may select Nebraska as forum for disputes even if parties or the deposit have little or no connection to Nebraska.
  • Savings language: Matters not addressed by the Act continue to be governed by general deposit or contract law; fraudulent or otherwise voidable transfers remain governed by other law.

Who is affected

  • Financial institutions and their customers (depositors and beneficiaries) who elect the Act in their account agreement.
  • Commercial parties using escrow/earnest money, security deposits, margin or other similar transactional funds.
  • Creditors and parties asserting attachment/garnishment rights against depositors’ assets.

Procedural history / timeline

  • Introduced: Jan 14, 2025 (Sen. Bob Hallstrom, primary sponsor).
  • Referred to Banking, Commerce and Insurance Committee; committee amendments (AM30 — replaced “bank” with “financial institution” and provided definition) adopted Jan 30, 2025.
  • Further amendment (AM216) adopted Feb 19, 2025.
  • Advanced through General and Select Files; placed on Final Reading Feb 24, 2025.
  • Passed Final Reading: Mar 6, 2025 (48–0–1); presented to Governor Mar 6; approved by Governor Mar 11, 2025.
  • Supporters included Nebraska Bankers Association, Nebraska Credit Union League, Nebraska Independent Community Bankers, and the Uniform Law Commission. No recorded opponents in committee.

Notes

  • Fiscal notes were filed (dates in January and February 2025); no dollar amounts are provided in the materials summarized here.
  • The Act is narrowly tailored to resolve four core uncertainties: definition of special deposit; treatment on depositor bankruptcy; applicability of creditor process; and limits on setoff/recoupment.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.