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SB 2123

AN ACT to create and enact chapter 6-08.6 of the North Dakota Century Code, relating to the Uniform Special Deposits Act; and to provide for application.

69th Legislative Assembly (2025-26)

Establishes a Uniform Special Deposits Act in ND to govern escrow-like funds, defining rights of depositors, beneficiaries, and banks, with protections and amendment rules.

Filed with Secretary Of State 03/20
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WeVote Research Nonpartisan
Bill Summary · SB 2123

Summary — SB 2123 (Uniform Special Deposits Act — North Dakota)

Status: Filed with Secretary of State 03/20/2025
Introduced: Jan. 7, 2025 (Sixty-ninth Legislative Assembly)
Sponsor/Requestor: Industry and Business Committee (at the request of the Commission on Uniform State Laws)

Note: The materials provided also include an unrelated Illinois SB2123 (consumer‑fraud provisions about imitation firearms). This summary focuses on the North Dakota bill that would create chapter 6-08.6 of the North Dakota Century Code (the Uniform Special Deposits Act).

Purpose and intent

SB 2123 creates a statutory framework (chapter 6-08.6) governing “special deposits” — deposits of funds placed with a bank or credit union under an account agreement that designates beneficiaries and conditions for payment (for example, escrow funds, security deposits, margin or other conditional custodial arrangements). The act is intended to provide clear, uniform rules governing the creation, administration, amendment, obligations of banks/credit unions, and rights of depositors and beneficiaries.

Key definitions and scope

  • “Account agreement”: a record between a bank/credit union and one or more depositors that states the parties’ intention to establish a special deposit.
  • “Special deposit”: a deposit that meets the conditions set out in the statute (see Sec. 6-08.6-04).
  • Other defined terms include depositor, beneficiary, contingency (an event that must occur before payment), knowledge/good faith, creditor process, permissible purpose, person, record, and state.
  • The chapter applies when the account agreement expressly states the parties’ intent to be governed by the chapter, even if the parties or transaction lack other ties to North Dakota.

Core provisions (high level)

  • Requirements for a deposit to qualify as a “special deposit” are specified (account agreement, beneficiaries, contingencies, etc.). (See Sec. 6-08.6-04 — text partially provided.)
  • Parties may choose North Dakota as the forum governing disputes arising from a special deposit.
  • Parties can vary certain statutory effects by agreement, but core protections (specified sections) are non‑waivable; provisions that would substantially excuse liability or limit remedies cannot be used to escape the statute’s mandatory protections.
  • Amendment rules: when and how a depositor and bank/credit union may amend an account agreement without a beneficiary’s consent are set out, with different standards depending on whether the beneficiary is a party to the agreement or has knowledge of its terms.
  • “Permissible purpose” examples include holding escrow for transactions, tenant security deposits, distributions under court order/settlement, margin and cash collateral supporting financial market infrastructure, and other commercial/testamentary objectives.

Who is affected

  • Banks and credit unions holding special deposits (trust companies and other depository institutions as defined in state law).
  • Depositors who establish and fund special deposits (e.g., buyers/sellers, landlords/tenants, parties to settlements).
  • Beneficiaries entitled to payment upon occurrence of contingencies.
  • Creditors and claimants (the statute addresses interplay with creditor process and voidable transfers).
  • Market participants using escrow, margin, or similar custodial arrangements.

Potential impact

  • Provides legal certainty and a uniform set of rules for conditional custodial deposits, reducing disputes about account terms, choice of law, and creditor access.
  • Standardizes duties and protections for banks/credit unions, depositors, and beneficiaries, which can lower transactional risk in real estate closings, settlements, tenant security deposits, and financial market operations.
  • May affect creditor recovery in some circumstances by clarifying when funds are treated as special deposits and the protections they carry.

Procedural / next steps

  • Text establishes chapter 6-08.6; full practical effect depends on later sections (termination, creditor claims, bank duties, liability, notice procedures) not fully included in the excerpt.
  • Because the provided materials are truncated and include unrelated content from another jurisdiction, review of the final enrolled bill or the complete chapter text is recommended to assess all rights, limitations, and implementation details (for example, notice requirements, priority relative to creditor process, and bank liability standards).

If you want, I can:
- Produce a section-by-section plain-language explainer of the full enacted chapter (if you supply the complete text), or
- Compare this draft to existing state law or the Uniform Law Commission model to highlight differences.

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

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