The proposed bill, SB1270, amends existing Arizona law regarding escrow agents by allowing them to utilize a system of reciprocal deposits to enhance insurance coverage with the Federal Deposit Insurance Corporation (FDIC) for funds held in escrow. This new provision enables escrow agents to deposit funds in federally insured banks and receive an equivalent amount of insured deposits from other financial institutions, thereby ensuring that all deposited funds are fully insured beyond the standard FDIC limit of $250,000. The bill also introduces definitions for "reciprocal deposit" and "eligible depository," clarifying the conditions under which these deposits can be made.

Additionally, the bill modifies the requirements for escrow agents to provide notice to buyers and sellers regarding their right to earn interest on deposited funds. It specifies that the notice must include a good faith estimate of potential interest earnings based on a $1,000 deposit over a thirty-day period. The bill also clarifies that while escrow agents cannot receive interest from depository institutions on escrow funds, they are permitted to receive services related to the administration of escrow accounts. Overall, SB1270 aims to enhance the financial security of escrow funds while ensuring transparency and compliance with existing regulations.

Statutes affected:
Introduced Version: 6-834
Senate Engrossed Version: 6-834
Chaptered Version: 6-834