§ 19-14.8-22. Trust account. (a) All money paid to a provider by, or on behalf of, an individual pursuant to a plan for distribution to creditors is held in trust. Within two (2) business days after receipt, the provider shall deposit the money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services.

(b) Money held in trust by a provider is not property of the provider or its designee. The money is not available to creditors of the provider or designee, except an individual from whom or on whose behalf the provider received money, to the extent that the money has not been disbursed to creditors of the individual.

(c) A provider shall:

(1) Maintain separate records of account for each individual to whom the provider is furnishing debt-management services;

(2) Disburse money paid by, or on behalf of, the individual to creditors of the individual as disclosed in the agreement, except that:

(A) The provider may delay payment to the extent that a payment by the individual is not final; and

(B) If a plan provides for regular periodic payments to creditors, the disbursement must comply with the due dates established by each creditor; and

(3) Promptly correct any payments that are not made or that are misdirected as a result of an error by the provider or other person in control of the trust account and reimburse the individual for any costs or fees imposed by a creditor as a result of the failure to pay or misdirection.

(d) A provider may not commingle money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services with money of other persons.

(e) A trust account must at all times have a cash balance equal to the sum of the balances of each individual's account.

(f) If a provider has established a trust account pursuant to subsection (a), the provider shall reconcile the trust account at least once a month. The reconciliation must compare the cash balance in the trust account with the sum of the balances in each individual's account. If the provider or its designee has more than one trust account, each trust account must be individually reconciled.

(g) If a provider discovers, or has a reasonable suspicion of, embezzlement or other unlawful appropriation of money held in trust, the provider immediately shall notify the director by a method approved by the director. Unless the director by rule provides otherwise, within five (5) days thereafter, the provider shall give notice to the director describing the remedial action taken or to be taken.

(h) If an individual terminates an agreement or it becomes reasonably apparent to a provider that a plan has failed, the provider shall promptly refund to the individual all money paid by, or on behalf of, the individual which has not been paid to creditors, less fees that are payable to the provider under § 19-14.8-23.

(i) Before relocating a trust account from one bank to another, a provider shall inform the director of the name, business address, and telephone number of the new bank. As soon as practicable, the provider shall inform the director of the account number of the trust account at the new bank.

History of Section. (P.L. 2006, ch. 243, § 3; P.L. 2006, ch. 291, § 3.)