68th OREGON LEGISLATIVE ASSEMBLY--1995 Regular Session
Enrolled
Senate Bill 41
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Department of Consumer and
Business Services)
CHAPTER ................
AN ACT
Relating to mortgage Clients' Trust Account; amending ORS 59.935
and 59.940.
Be It Enacted by the People of the State of Oregon:
**************************** SECTION 1. ORS 59.935 is amended
to read:
59.935. (1) Each mortgage banker or mortgage broker shall
maintain in this state one or more separate bank accounts that
shall be designated a Clients' Trust Account in which all trust
funds received or handled by the mortgage banker or mortgage
broker shall be deposited unless, pursuant to written agreement
of all parties having an interest in the trust funds, the trust
funds are immediately placed in a neutral escrow depository in
this state.
(2) Each mortgage banker or mortgage broker shall file with the
Director of the Department of Consumer and Business Services, on
forms approved by the director, a statement identifying the name
of the bank or banks, account number or account numbers, and name
of account or accounts for each Clients' Trust Account
maintained.
(3) Each mortgage banker or mortgage broker shall authorize the
director or an authorized representative of the director, on a
form approved by the director, to examine any Clients' Trust
Account, by a duly authorized representative of the director. The
examination shall be made at such times as the director may
direct.
(4) If a branch office maintains a separate Clients' Trust
Account, a separate bookkeeping system shall be maintained in the
branch office, provided a copy of { - each document required by
the provisions of ORS 696.280 - } { + all documents evidencing
payments into and from the Clients' Trust Account + } is
maintained in the main office of the mortgage banker or mortgage
broker.
(5) Trust funds received by a mortgage banker or mortgage
broker may be placed by the mortgage banker or mortgage broker in
a federally insured interest-bearing bank account, designated a
Clients' Trust Account, but only with the prior written approval
of all parties having an interest in the trust funds. The
earnings of such interest-bearing account shall not inure to the
benefit of the mortgage banker or mortgage broker unless
expressly approved in writing before deposit of the trust funds
by all parties having an interest in the trust funds.
(6) A mortgage banker or mortgage broker is not entitled to any
part of any interest earnings on trust funds deposited under
subsection (5) of this section or to any part of the earnest
money or other money paid to the mortgage banker or mortgage
broker in connection with any real estate transaction as part or
all of the mortgage banker's or mortgage broker's commission or
fee until the transaction has been completed or terminated. The
question of the disposition of forfeited earnest money shall be
negotiated between a mortgage banker or mortgage broker and a
client at the time of executing any earnest money agreement. The
result of such negotiation shall be filled in on the agreement
form at the time of signing by the client and either separately
initialed by the client or placed immediately above the signature
of the client.
(7) Clients' Trust Account funds are not subject to execution
or attachment on any claim against the mortgage banker or
mortgage broker.
(8) No person shall knowingly keep or cause to be kept any
funds or money in any bank under the heading of Clients' Trust
Account or any other name designating such funds or money as
belonging to the clients of any mortgage banker or mortgage
broker, except actual trust funds deposited with the banker or
broker.
(9) The director may provide by rule for other records to be
maintained and for the manner in which trust funds are deposited,
held and disbursed.
**************************** SECTION 2. ORS 59.940 is amended
to read:
59.940. (1) Each mortgage banker or mortgage broker, at the
time a Clients' Trust Account is opened under ORS 59.935, shall
provide the bank in which the account is opened with a notice in
substantially the following form:
_________________________________________________________________
NOTICE OF CLIENTS' TRUST ACCOUNT
To: (name of bank) _____
{ - Under the provisions of ORS 59.840 to 59.960, I am the
mortgage banker or mortgage broker for (licensed name of mortgage
banker or mortgage broker) ________. - }
{ + I, ________, am the (owner, president, managing general
partner or other position description) ________ of (name of
mortgage banker or mortgage broker) ________ and am authorized to
act on behalf of (name of mortgage banker or mortgage broker)
________. + }
{ - Further, under - } { + Under the provisions of + } ORS
59.935, I am required to maintain in Oregon a Clients' Trust
Account for the purpose of holding funds belonging to others.
With regard to the account(s) numbered ______ which is/are
designated as a Clients' Trust Account, the account(s) is/are
maintained with you as a depository for money belonging to
persons other than myself and in my fiduciary capacity as a
mortgage banker or mortgage broker established by client
agreements in separate documents.
Dated: (insert date)
____________
(signature of { + person authorized to act on behalf of + }
mortgage banker
or mortgage broker)
ACKNOWLEDGMENT OF RECEIPT
Enrolled Senate Bill 41 Page 2
I, ____________, a duly authorized representative of (bank)
____________, do hereby acknowledge receipt of the above NOTICE
OF CLIENTS' TRUST ACCOUNT on (date) ____.
____________
(signature)
____________
(title)
_________________________________________________________________
(2) The acknowledged copy of the notice described in subsection
(1) of this section shall be retained by the mortgage banker or
mortgage broker as provided in ORS 59.935 for the retention of
trust account records, subject to inspection by the Director of
the Department of Consumer and Business Services or the
director's authorized representative.
----------
Passed by Senate January 31, 1995
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 15, 1995
...........................................................
Speaker of House
Enrolled Senate Bill 41 Page 3
Received by Governor:
......M.,............., 1995
Approved:
......M.,............., 1995
...........................................................
Governor
Filed by Office of Secretary of State:
......M.,............., 1995
...........................................................
Secretary of State
Enrolled Senate Bill 41 Page 4