N.Y. Banking Law § 680-a: Definitions

§ 680-a. Definitions. As used in this article, the following terms

shall have the following meanings:

1. "Account agreement" means an agreement that:

(a) is in a record between a bank and one or more depositors;

(b) may have one or more beneficiaries as additional parties; and

(c) states the intention of the parties to establish a special deposit

governed by this article.

2. "Bank" means a person engaged in the business of banking and

includes a savings bank, savings and loan association, credit union,

trust company, and a bank as defined in section two of this chapter.

Each branch or separate office of a bank is a separate bank for the

purpose of this article.

3. "Beneficiary" means a person that:

(a) is identified as a beneficiary in an account agreement; or

(b) if not identified as a beneficiary in an account agreement, may be

entitled to payment from a special deposit:

(i) under the account agreement; or

(ii) on termination of the special deposit.

4. "Contingency" means an event or circumstance stated in an account

agreement that is not certain to occur but must occur before the bank is

obligated to pay a beneficiary.

5. "Creditor process" means attachment, garnishment, levy, notice of

lien, sequestration, or similar process issued by or on behalf of a

creditor or other claimant.

6. "Depositor" means a person that establishes or funds a special

deposit.

7. "Good faith" means honesty in fact and observance of reasonable

commercial standards of fair dealing.

8. "Knowledge" means:

(a) with respect to a beneficiary, actual knowledge of the fact; or

(b) with respect to a bank holding a special deposit:

(i) if the bank:

(1) has established a reasonable routine for communicating material

information to an individual to whom the bank has assigned

responsibility for the special deposit; and

(2) maintains reasonable compliance with the routine, actual knowledge

of the fact by that individual; or

(ii) if the bank has not established and maintained reasonable

compliance with a routine described in subparagraph (i) of this

paragraph or otherwise exercised due diligence, implied knowledge of the

fact that would have come to the attention of an individual to whom the

bank has assigned responsibility for the special deposit.

9. "Obligated to pay a beneficiary" or "obligation to pay a

beneficiary" means a beneficiary is entitled under the account agreement

to receive from the bank a payment when:

(a) a contingency has occurred; and

(b) the bank has knowledge the contingency has occurred.

10. "Permissible purpose" means a governmental, regulatory,

commercial, charitable, or testamentary objective of the parties stated

in an account agreement. The term includes an objective to:

(a) hold funds:

(i) in escrow, including for a purchase and sale, lease, buyback, or

other transaction;

(ii) as a security deposit of a tenant;

(iii) that may be distributed to a person as remuneration, retirement

or other benefit, or compensation under a judgment, consent decree,

court order, or other decision of a tribunal; or

(iv) for distribution to a defined class of persons after

identification of the class members and their interest in the funds;

(b) provide assurance with respect to an obligation created by

contract, such as earnest money to ensure a transaction closes;

(c) settle an obligation that arises in the operation of a payment

system, securities settlement system, or other financial market

infrastructure;

(d) provide assurance with respect to an obligation that arises in the

operation of a payment system, securities settlement system, or other

financial market infrastructure; or

(e) hold margin, other cash collateral, or funds that support the

orderly functioning of financial market infrastructure or the

performance of an obligation with respect to the infrastructure.

11. "Person" means an individual, estate, business or nonprofit

entity, government or governmental subdivision, agency, or

instrumentality, or other legal entity. The term includes a protected

series, however denominated, of an entity if the protected series is

established under law that limits, or limits if conditions specified

under law are satisfied, the ability of a creditor of the entity or of

any other protected series of the entity to satisfy a claim from assets

of the protected series.

12. "Record" means information:

(a) inscribed on a tangible medium; or

(b) stored in an electronic or other medium and retrievable in

perceivable form.

13. "Special deposit" means a deposit that satisfies section six

hundred eighty-d of this article.

14. "State" means a state of the United States, the District of

Columbia, Puerto Rico, the United States Virgin Islands, or any other

territory or possession subject to the jurisdiction of the United

States. The term includes an agency or instrumentality of the state.