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

SB 384 establishes the Rhode Island Special Deposits Act, creating a legal framework for specific bank deposits held under written agreements between banks, depositors, and named beneficiaries. It defines key terms like "special deposit" (funds held for escrow, security, or other defined purposes) and requires banks to pay beneficiaries only when a specified condition (contingency) occurs and the bank has knowledge of it. The law protects these deposits from standard creditor actions (like garnishment) during normal legal proceedings, while clarifying that regular deposits and fraudulent transfers remain unaffected. This directly impacts banks, individuals or businesses setting up such deposits, and beneficiaries named in agreements.