Bill Text: TX HB2240 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to the disbursement of funds from a trust fund account by a title insurance company, title insurance agent, or escrow officer.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Engrossed - Dead) 2021-05-26 - Removed from local & uncontested calendar [HB2240 Detail]
Download: Texas-2021-HB2240-Comm_Sub.html
| By: Smithee (Senate Sponsor - Creighton) | H.B. No. 2240 | |
| (In the Senate - Received from the House April 19, 2021; | ||
| May 4, 2021, read first time and referred to Committee on Business & | ||
| Commerce; May 21, 2021, reported adversely, with favorable | ||
| Committee Substitute by the following vote: Yeas 8, Nays 0; | ||
| May 21, 2021, sent to printer.) | ||
| COMMITTEE SUBSTITUTE FOR H.B. No. 2240 | By: Hancock | |
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| relating to the disbursement of funds from a trust fund account by a | ||
| title insurance company, title insurance agent, or escrow officer. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 2651.202, Insurance Code, is amended by | ||
| adding Subsection (a-1) to read as follows: | ||
| (a-1) For the purpose of this section, "good funds" includes | ||
| United States dollars received and deposited in an account through | ||
| an Automated Clearing House (ACH) transaction if the ACH | ||
| transaction is irrevocable and final and cannot be canceled or | ||
| reversed by the consumer once the funds have been directly | ||
| transferred from the consumer's bank account. The ACH transaction | ||
| must be a bank-to-bank transfer of funds or a deposit of funds from | ||
| a consumer's account at a depository institution and must not be | ||
| treated as a consumer payment with respect to chargeback and | ||
| pullback consumer payment protections. The transferred funds must: | ||
| (1) be directly linked to and directly backed by funds | ||
| in the consumer's account at the depository institution; | ||
| (2) be directly transferred from the consumer's bank | ||
| account and directly deposited into the settlement service | ||
| provider's escrow account by ACH transfer in accordance with the | ||
| standards of any applicable governing body or standards | ||
| organization with oversight over ACH transactions; | ||
| (3) at all points during the transfer process, utilize | ||
| a unique identification and tracking system that designates the | ||
| funds for their authorized purpose; | ||
| (4) not be subject to third-party access or | ||
| commingling of funds at any point during the transfer process; and | ||
| (5) not utilize an intermediary account other than by | ||
| a financial institution acting as ACH originator and operator as | ||
| part of the ACH network. | ||
| SECTION 2. Section 2652.004, Insurance Code, is amended by | ||
| adding Subsection (a-1) to read as follows: | ||
| (a-1) For the purpose of this section, "good funds" includes | ||
| United States dollars received and deposited in an account through | ||
| an Automated Clearing House (ACH) transaction if the ACH | ||
| transaction is irrevocable and final and cannot be canceled or | ||
| reversed by the consumer once the funds have been directly | ||
| transferred from the consumer's bank account. The ACH transaction | ||
| must be a bank-to-bank transfer of funds or a deposit of funds from | ||
| a consumer's account at a depository institution and must not be | ||
| treated as a consumer payment with respect to chargeback and | ||
| pullback consumer payment protections. The transferred funds must: | ||
| (1) be directly linked to and directly backed by funds | ||
| in the consumer's account at the depository institution; | ||
| (2) be directly transferred from the consumer's bank | ||
| account and directly deposited into the settlement service | ||
| provider's escrow account by ACH transfer in accordance with the | ||
| standards of any applicable governing body or standards | ||
| organization with oversight over ACH transactions; | ||
| (3) at all points during the transfer process, utilize | ||
| a unique identification and tracking system that designates the | ||
| funds for their authorized purpose; | ||
| (4) not be subject to third-party access or | ||
| commingling of funds at any point during the transfer process; and | ||
| (5) not utilize an intermediary account other than by | ||
| a financial institution acting as ACH originator and operator as | ||
| part of the ACH network. | ||
| SECTION 3. This Act takes effect September 1, 2021. | ||
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