New York Codes, Rules and Regulations › Title 22 - JUDICIARY › Subtitle B - Courts › Chapter IV - Supreme Court › Subchapter E - All Departments › Part 1300 - Dishonored Check Reporting Rules For Attorney Special, Trust And Escrow Accounts › Section 1300.1 - Dishonored and overdraft check reports

Current through Register Vol.
					 46, No. 28, July 10, 2024
(a) Special bank accounts required by
					 rule 1.15 of the Rules of Professional Conduct (22 NYCRR 1200.0) shall be
					 maintained only in banking institutions which have agreed to provide dishonored
					 check and overdraft reports in accordance with the provisions of this
					 section.
(b) An
					 agreement to provide dishonored check and overdraft reports shall be filed with
					 the Lawyers' Fund for Client Protection, which shall maintain a central
					 registry of all banking institutions which have been approved in accordance
					 with this section, and the current status of each such agreement. The agreement
					 shall apply to all branches of each banking institution that provides special
					 bank accounts for attorneys engaged in the practice of law in this State, and
					 shall not be cancelled by a banking institution except on 30 days' prior
					 written notice to the Lawyers' Fund for Client Protection.
(c) A dishonored check and
					 overdraft report by a banking institution shall be required whenever a properly
					 payable instrument is presented against an attorney special, trust or escrow
					 account which contains insufficient available funds, irrespective of whether
					 the instrument is honored [and the banking institution dishonors the instrument
					 for that reason]. A properly payable instrument means an instrument which, if
					 presented in the normal course of business, is in a form requiring payment
					 under the laws of the State of New York.
(d) A dishonored check and overdraft
					 report shall be substantially in the form of the notice of dishonor which the
					 banking institution customarily forwards to its customer, and may include a
					 photocopy or a computer-generated duplicate of such notice. In the case of an
					 instrument that is presented against insufficient funds, the report shall
					 identify the financial institution, the lawyer or law firm, the account number,
					 the date of presentation for payment, and the date paid, as well as the amount
					 of overdraft created thereby.
(e) Dishonored check and overdraft
					 reports shall be mailed to the Lawyers' Fund for Client Protection, 119
					 Washington Avenue, Albany, NY 12210, within five banking days after the date of
					 presentment against insufficient available funds.
(f) The Lawyers' Fund for
					 Client Protection shall hold each dishonored check and overdraft report for 10
					 business days to enable the banking institution to withdraw a report provided
					 by inadvertence or mistake; except that the curing of an insufficiency of
					 available funds by a lawyer or law firm by the deposit of additional funds
					 shall not constitute reason for withdrawing a dishonored check and overdraft
					 report.
(g) After
					 holding the dishonored check and overdraft report for 10 business days, the
					 Lawyers' Fund for Client Protection shall forward it to the attorney
					 disciplinary committee for the judicial department or district having
					 jurisdiction over the account holder, as indicated by the law office or other
					 address on the report, for such inquiry and action that attorney disciplinary
					 committee deems appropriate.
(h) Every lawyer admitted to the Bar of
					 the State of New York shall be deemed to have consented to the dishonored check
					 and overdraft reporting requirements of this section. Lawyers and law firms
					 shall promptly notify their banking institutions of existing or new attorney
					 special, trust, or escrow accounts for the purpose of facilitating the
					 implementation and administration of the provisions of this section.