NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10905 REVISED MEMO 07/02/2018
TITLE OF BILL: An act to amend the banking law, in relation to public
awareness of joint deposit and convenience accounts
PURPOSE OR GENERAL IDEA OF BILL:
Relates to the establishment of joint deposit and convenience accounts
SUMMARY OF PROVISIONS:
Section 1: Amends the Banking Law by adding a new section 679.
Section 2: Effective date.
In February 2017, the New York State Senate and Assembly Aging Commit-
tees held a joint public hearing regarding the incidence and prevention
of elder abuse in the State of New York. As part of its testimony at the
hearing, the District Attorneys Association of the State of New York
recommended modifications to the banking law to require that account
holders be informed of the opportunity to open convenience accounts as
opposed to joint accounts when managing their finances.
Joint accounts are commonly opened when an elderly individual is seeking
assistance with paying bills or budgeting for daily living expenses.
Unfortunately, these types of accounts pose several risks for elder
abuse including financial exploitation. Pursuant to banking law section
675, joint accounts create a legal relationship between co-owners that
includes the equal right to access funds in the account as well as the
right of survivorship when one of the co-owners dies. As a result,
vulnerable seniors are at increased risk of joint owners withdrawing
money for their own use, exposing account funds to creditor claims, and
undermining a senior's estate plan.
In contrast to joint accounts, convenience accounts allow the depositor
to retain ownership rights, and establishes a fiduciary relationship
that binds the other person named on the account to act in the best
interests of the depositor. Due to this arrangement, criminal prose-
cution is more viable when there is misuse of a vulnerable elderly
While access to these accounts is established in law, and has been advo-
cated for by senior advocacy groups, the Consumer Protection Bureau and
law enforcement, it has been reported that banking institutions do not
publicize these types of accounts, and in some instances, do not offer
This legislation will allow for a public awareness campaign to inform
consumers on banking services and options, differences in terms of
service, and varying rights and responsibilities associated with differ-
ent types of accounts. The public awareness campaign is intended to
inform vulnerable seniors, those with conditions that impair financial
independence, as well as families and providers, of the potential
options for financial planning in the State.
PRIOR LEGISLATIVE HISTORY:
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This act shall take effect immediately.