AB 504

P.O.D. accounts

This bill allows a financial institution that has established a payable-on-death

(P.O.D.) account and made a loan to the P.O.D. account owner to, upon the death of

the account owner, withhold distribution to the P.O.D. account beneficiary of an

amount necessary to satisfy the account owner's loan obligation to the financial

institution.

Current law allows a depositor of a financial institution to establish a P.O.D.

account under which the sums on deposit at the time of the depositor's death are

transferred to a designated P.O.D. beneficiary and are not subject to distribution by

will or otherwise as part of the deceased depositor's estate.

Under this bill, if the financial institution has made a loan to the depositor and

has any lien right, right to setoff, or security interest in the P.O.D. account resulting

from the loan, then upon the depositor's death, the financial institution may retain

control of all sums on deposit in the P.O.D. account to the extent necessary to exercise

its lien right or right to setoff or to protect its security interest. The financial

institution must then pay the remaining balance of the account to the P.O.D.

beneficiary.

Bank's payment duty on lost, destroyed, or stolen instrument

This bill reduces the period, from 90 days to 14 days, after certain checks are

issued or guaranteed before the issuing or guaranteeing bank is obligated to pay the

amount of the check to a person who meets specified requirements and claims that

the check has been lost, destroyed, or stolen.

Under current law, if certain requirements are satisfied, a person may claim the

right to receive the amount of a cashier's check, teller's check, or certified check that

was lost, destroyed, or stolen by communicating the claim to the obligated bank (the

issuer or guarantor of the check), describing the check with reasonable certainty, and

requesting payment of the amount of the check. If various requirements are

satisfied, the obligated bank must pay the amount of the check to the claimant on the

later of the time that the claim is asserted or the 90th day after the date of the

cashier's check or teller's check or, for a certified check, the 90th day after the date

of the obligated bank's guarantee to honor the check. Payment to the claimant

discharges all liability of the obligated bank with respect to the check. However,

under certain circumstances, the claimant must refund the payment to the obligated

bank if the check is subsequently presented for payment by a person with certain

superior rights.

Under this bill, if all applicable requirements are satisfied, the obligated bank

must pay the claimant the amount of the lost, destroyed, or stolen check on the later

of the time that the claim is asserted or the 14th day after the date of the cashier's

check or teller's check or, for a certified check, the 14th day after the date of the

obligated bank's guarantee to honor the check.