An act to amend the banking law, in relation to establishing multiple-
person accounts; and to repeal certain provisions of such law relating
This bill seeks to reform sections of the Banking Law governing joint
accounts, as existing law has harmed account owners and burdened the
court system with related litigation. It establishes multiple-person
accounts governed by contemporary best practices to align the law with
account owners' expectations and creates an account signature card to
promote fair and reasonable outcomes.
Section 1. Adds a new Section 675 (d) to the banking law. *This limits
scope of Section 675 of the banking law so it will not apply to accounts
established for personal use.
Section 2. Repeals and replaces section 678 of the banking law.
Subdivision 1. Definitions
Subdivision 2. Scope of section.
*This section applies to multiple-person and single-owner accounts in
NYS established for personal use.
*This section does not affect the law governing business accounts and
fiduciary or trust accounts established outside the terms of the bank
Subdivision 3. Types of Accounts.
*A bank may establish a multiple-person account, with or without the
right of survivorship, and with or without one or more authorized signer
designations. Subdivision 4. Administration of account signature card.
*The account signature card establishes the account type and terms and
must be administered by the bank upon opening or modifying the terms of
an account. All owners must agree to modification in writing.
*If not administered by a bank, the account signature card must be nota-
*If filed electronically, the account signature card must be submitted
in compliance with executive law Section 135(C) and the state technology
*Bank must keep the account signature card for 6 years after an account
is closed.
Subdivision 5. Designation of authorized signer.
*An account owner may add an 'authorized signer to an account, but if
there is more than one account owner, all owners must agree in writing
on the form.
*An authorized signer's authority to make transaction for the conven-
ience of account owner(s) survives disability or incapacity unless there
is clear and convincing evidence of a different intent.
*Death of sole or last account owner ends authorized signer's authority.
Subdivision 6. Account ownership during lifetime.
*In a multiple-owner account, account funds belong to account owners in
proportion to their net contribution (deposits minus withdrawals).
In the absence of evidence, net contributions are presumed to be equal.
*Authorized signers have no beneficial right to account funds. Subdivi-
sion 7. Rights at death.
*Rights at the death of an account owner are determined by the terms of
the account at the time of the account owner's death.
*Transfers resulting under section are effective based on the terms of
the account and not subject to probate.
*If account owners have not chosen survivorship on the account signature
card, or there is clear and convincing evidence that survivorship was
not intended, account funds will be disposed of as part of a deceased
account owner's estate.
*If account owners have chosen survivorship on the account signature
card, or there is clear and convincing evidence that survivorship was
intended, then a deceased account owner's funds shall pass equally among
surviving account owners.
*The ownership rights of a surviving account owner and the deceased
owner's estate are subject to payment requests made by the account owner
before death.
*Regardless of payment status (before or after death), the surviving
account owners are liable for unpaid requests, limited to a propor-
tionate share of the transferred amount under this section. Subdivision
B. Alteration of rights.
*An account owner can alter the terms of the account by completing a new
account signature card.
*Survivorship rights may not be altered by will.
*If there is more than one account owner, all owners must consent to the
alteration in writing using the account signature card. Subdivision 9.
Payment on multiple-owner accounts.
*Upon request, a bank may pay account funds in a multiple-owner account
- Account owner(s), irrespective of disability, incapacity, or death.
The personal representative of a deceased account owner, or if there is
none, according to the surrogate's court procedure act, if proof of
death confirms the deceased was the survivor of all other account
owners, excluding accounts without the right of survivorship.
Subdivision 10. Payment to authorized signer,
*A bank may pay account funds to an authorized signer regardless of the
disability, incapacity, or death of an account owner when the request is
Subdivision 11. Discharge from liability.
*Payment made pursuant to the section complying with the terms of the
account and account signature card discharges the bank from all claims
for amounts paid, irrespective of beneficial account ownership. Payment
can occur regardless of the disability, incapacity, or death of an
account owner, beneficiary, or authorized signer.
*Protection does not cover payments made after the bank receives written
notice preventing such payments, provided the bank has had a reasonable
chance to act. The protection continues unless the notice is withdrawn,
or successors of the deceased account owners agree on a request for
*In case of a dispute between account owners, the bank may refuse, with-
out liability, to make payments. The bank is not obligated to inquire
about the source of a deposit or application of a payment.
*Bank protection under this section does not affect the rights of
account owners in disputes among themselves or their successors reaard-
ing ownership of account funds or payments made from accounts.
*Beneficial account ownership applies only to controversies between
account owners and their creditors or other successors. It does not
affect a bank's ability to make payments as per the terms of the
Subdivision 12. Existing accounts.
*Banks must notify the owners of multiple-person accounts established
before the effective date of this section about the requirement to
submit an account signature card within one year from the effective date
of this act. The notice must include the account signature card.
*The notice can be executed by mail or electronically. If the bank has
not received an account signature card from an account owner within 6
months, it must provide a second notice. Subdivision 13. Regulations of
the superintendent.
*The Dept. of Financial Services may make rules and regulations govern-
ing multiple-person accounts. Subdivision 14. Severability clause
*If any provision of this act is invalid, it shall not affect other
provisions that can be given effect without the invalid provision.
Section 3. Amends Section 679 of the banking law.
*Replaces reference to convenience account with reference to multiple-
person account.
Section 4. Effective date shall be 180 days after this bill shall have
become a law.
Written in 1965, Section 675 of the Banking Law provides for joint
accounts, or accounts owned by more than one person by joint tenancy.
Our surrogacy judges are calling for reform of this section, as it has
caused extensive litigation due to the antiquated moiety rule, a lack of
clear ownership delineation, and an overreliance on the presumption of
First, the moiety rule is an antiquated doctrine; it presumes that upon
creating or depositing funds into a joint account, half of the funds
constitute an irrevocable gift to the other joint owner. This presents
the following problems: joint owners rarely intend a change of benefi-
cial ownership upon establishing an account or making a deposit; a
judgement against one joint owner can unfairly entangle the others; and
unfair withdrawals by one joint owner can leave others without recourse
beyond their moiety.
Second, banks are failing to clearly delineate joint account ownership.
Joint accounts with a right of survivorship are a will substitute, mean-
ing that the terms of the account govern the disposition of account
funds over a will or the laws of intestacy. In some cases, an agent
named on a joint account is erroneously classified as a joint owner so
that the account funds pass to such agent over rightful beneficiaries,
heirs, or devisees. Senior citizens and the developmentally disabled are
most at risk, as they must frequently appoint agents to make trans-
actions for their convenience.
Third, overreliance on the presumption of survivorship has caused irre-
parable harm to many. joint owners. This presumption dictates that if a
joint owner dies, the account funds will pass to the surviving joint
owner(s). Once the funds pass, they are frequently unable to be recov-
ered, such that if they vest in an incorrect person, there is no remedy.
This problem is compounded by the previously described lack of clear
ownership delineation.
This bill recognizes that an account owner may add another person to an
account for various reasons. The account owner may intend to share life-
time ownership of the account with more than one person, to pass account
funds to another person upon her death, or simply to enable account
transactions by a third person as a convenience without granting owner-
ship or survivorship rights.
Joint accounts under existing law do not adequately allow account owners
to distinguish among these different functions. Moreover, the account
owner's use of an account for one purpose may yield unwanted conse-
quences for other purposes. By contrast, this bill provides account
owners the flexibility to choose the type of account that best suits
their purposes and the tools to do so unambiguously.
This bill limits Banking Law Section 675 so that it shall not capture
accounts created for personal use. It replaces section 678 with new
rules for accounts created for personal use. The new language in
Section 678 was largely adopted from the Uniform Probate Code and
Uniform Multiple Party Accounts Act. It would replace joint accounts
with multiple-person accounts, addressing the problems with the former.
First, this bill revokes the moiety rule for personal accounts. Account
funds belong to account owners during their lifetimes according to each
account owner's net contribution to the account, creating a tenancy in
common during life. No intention to make a gift is imputed from opening
an account in multiple names or from making an additional deposit to an
Second, this bill clearly delineates ownership in multiple-person
accounts. This bill statutorily requires banks to provide their depos-
itors with an account signature card written in accessible language and
containing simple instructions to both the financial institution and
account owner(s) to unambiguously set the terms of an account.
The account signature card provides for accounts that may be owned by a
single owner or multiple owners, may include one or more authorized
signer (agency) designations, and may be with or without the right of
survivorship. Thus, the signature card clarifies the relationships and
rights among the various persons involved with an account.
Third, this bill does not rely on presumptions. Although it presumes
that account funds will pass to a deceased account owner's estate, the
mandatory account signature card allows an account owner to plainly
state how her estate will pass while alive. This greatly reduces the
risk that account funds will be irreparably lost while still allowing
courts to overturn unintended, erroneous or predatory arrangements with
clear and convincing evidence.
This bill addresses the shortcomings of Banking Law Section 675, making
comprehensive reforms to the outdated moiety rule, poor ownership delin-
eation, and overreliance on the presumption of survivorship. By intro-
ducing modern best practices and requiring the administration of account
signature cards, this bill ensures that account owners can make informed
decisions that will be carried out as intended. These changes aim to
align the law with the expectations of account owners, providing a
framework that is fair and reasonable.
This act shall take effect on the one hundred eightieth day after it
shall have become a law.

Statutes affected:
S9383: 675 banking law, 678 banking law, 679 banking law
S9383A: 675 banking law, 678 banking law, 679 banking law