The proposed bill establishes new regulations regarding the treatment of fiduciary and custodial accounts held by financial institutions in the context of receivership, conservatorship, or bankruptcy. Specifically, it stipulates that such accounts, if they meet certain criteria, will not be considered assets or liabilities of the financial institution during these proceedings. The bill outlines the requirements for these accounts, including the necessity for a documented trust or custodial agreement, proper identification and segregation of assets, and compliance with relevant state statutes. Additionally, it clarifies the definitions of "custodial account" and "fiduciary account," emphasizing the nature of the financial institution's responsibilities in managing these accounts.

Furthermore, the bill amends existing statutes to enhance the framework for digital asset custodial services provided by banks. It allows banks to offer custodial services for digital assets with prior written notice to the commissioner and clarifies that these digital assets will not be classified as depository liabilities or assets of the bank. The bill also includes provisions for the discharge of the commissioner from receivership duties upon the resolution of jurisdictional issues in bankruptcy proceedings. The effective date for this act is set for July 1, 2024.

Statutes affected:
24LSO-0102 v0.4: 13-5-417, 34-29-104