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SB 384

AN ACT RELATING TO FINANCIAL INSTITUTIONS -- THE RHODE ISLAND SPECIAL DEPOSITS ACT

2025 Regular Session Introduced by Mark McKenney

SB 384 creates Rhode Island statutory protections for special deposit accounts held by financial institutions, establishing segregation requirements and institutional oversight standards.

03/25/2025 Committee recommended measure be held for further study
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Bill Summary · SB 384

Legislative bill overview

SB 384 establishes the Rhode Island Special Deposits Act, which creates a legal framework for handling special or segregated deposit accounts at financial institutions. The bill defines what qualifies as a special deposit, outlines the responsibilities of financial institutions holding such funds, and establishes protections for deposit holders.

Why is this important

Special deposits—such as escrow accounts, trust accounts, or client funds held by attorneys and real estate professionals—represent billions of dollars in Rhode Island that must be legally protected and properly managed. Clear statutory guidelines ensure these funds remain separate from institutional assets, protecting consumers and professionals who rely on financial institutions to safeguard money not belonging to the institution itself.

Potential points of contention

  • Scope and definitions: The bill's specific definitions of "special deposits" may create ambiguity about which account types are covered, potentially leaving gaps or unintentionally restricting legitimate uses
  • Institutional burden: Financial institutions may argue compliance costs and administrative requirements for tracking and reporting segregated accounts create operational burdens without proportional consumer benefit
  • Regulatory overlap: Questions about whether this duplicates existing federal protections (like FDIC rules) or creates conflicting state-level requirements that complicate interstate banking operations

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

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