January, 2010
To Our Valued Customers
With the new "Good Funds" legislation that took place on January 1st, 2010, H.B. Wilkinson Title Company would like to provide our customers with accurate and thorough information regarding this new legislation and how it will affect real estate closings. We are providing the following explanation in order to assist you, our valued customer, on this change.
The new Illinois Good Funds Law took effect on January 1st, 2010. This law is an amendment to the Illinois Title Insurance Act and adds a new Section 26 (copy on pg. 2).
Here is a brief summary of the new good funds law and how it works:
- Funds "received from any single party to the transaction"- this is an aggregate amount of all deposits made by any party. [Example: $40,000 wire and $20,000 cashier's check tendered by the same party exceed the $50,000 limit and the cashier's check would not be acceptable.]
- Applies to all types of escrows, including construction escrows
- Penalty for violating the Act: $1,000
$49,999 and less: A title company cannot disburse in connection with any escrow unless the funds in the amount of less that $50,000 received from any single party are "Collected Funds" or "Good Funds".
Good Funds:
- Cash (not accepted by most title companies in any large amount)
- Wired funds unconditionally held by and credited to the fiduciary trust account of the title company or agent
- Cashier's checks, certified checks, bank money orders, official bank checks
- Personal check or checks in aggregate amount not exceeding $500 per closing, if we have reasonable grounds to believe that sufficient funds are available
- Attorney's trust account or Real Estate Broker check, if we have reasonable grounds to believe that sufficient funds are available
- Government check (United States, State of Illinois, City, County, or Political Subdivision)
- Title Company Check (if we have reasonable grounds to believe there are sufficient funds in that account)
Collected Funds: Funds deposited, finally settled and credited to the account of the company, agent or inde- pendent escrowee making the disbursement.
$50,000 and greater: A title company cannot disburse in connection with any escrow unless the funds in the amount of greater than $50,000 received from any single party are "Collected Funds" or the "Good Funds" listed under numbers 2, 6 and 7 above, which are:
- 2. Wires
- 6. Government Check (United States, State of Illinois, City, County, or Political Subdivision)
- 7. Title Company check (if we have reasonable grounds to believe there are sufficient funds in the account)
Amendent to the Illinois Title Insurance Act
§ 215 ILCS 155/26. (Effective January 1, 2010) Settlement funds
Sec. 26. (a) A title insurance company, title insurance agent, or independent escrowee shall not make disburse- ments in connection with any escrows, settlements, or closings out of a fiduciary trust account or accounts unless the funds in the aggregate amount of $ 50,000 or greater received from any single party to the transaction are good funds as defined in paragraphs (2), (6), or (7) of subsection (c) of this Section; or are collected funds as defined in subsection (d) of this Section.
(b) A title insurance company or title insurance agent shall not make disbursements in connection with any es- crows, settlements, or closings out of a fiduciary trust account or accounts unless the funds in the amount of less than $ 50,000 received from any single party to the transaction are collected funds or good funds as defined in subsection (c) of this Section.
(c) "Good funds" means funds in one of the following forms:
(1) lawful money of the United States;
(2) wired funds unconditionally held by and credited to the fiduciary trust account of the title insurance company, the title insurance agent, or independent escrowee;
(3) cashier's checks, certified checks, bank money orders, official bank checks, or teller's checks drawn on or issued by a financial institution chartered under the laws of any state or the United States and unconditionally held by the title insurance company, title insurance agent, or independent escrowee;
(4) a personal check or checks in an aggregate amount not exceeding $ 5,000 per closing, provided that the title insurance company, title insurance agent, or independent escrowee has reasonable grounds to believe that sufficient funds are available for withdrawal in the account upon which the check is drawn at the time of disbursement;
(5) a check drawn on the trust account of any lawyer or real estate broker licensed under the laws of any state, provided that the title insurance company, title insurance agent, or independent escrowee has reasonable grounds to believe that sufficient funds are available for withdrawal in the account upon which the check is drawn at the time of disbursement;
(6) a check issued by this State, the United States, or a political subdivision of this State or the United States; or
(7) a check drawn on the fiduciary trust account of a title insurance company or title insurance agent, provided that the title insurance company, title insurance agent, or independent escrowee has reasonable grounds to believe that sufficient funds are available for withdrawal in the account upon which the check is drawn at the time of disbursement.
(d) "Collected funds" means funds deposited, finally settled, and credited to the title insurance company, title insurance agent, or independent escrowee's fiduciary trust account.
