DEPOSITS IN FINANCIAL INSTITUTIONS GENERALLY

HRS div. 2, tit. 22, ch. 412, art. 4

in effect

HRS §412:4-100 Law applicable

412:4-100. Law applicable (a) Sections 412:4-101, 412:4‑102 and 412:4-104 shall apply to all Hawaii financial institutions which are authorized by this chapter to solicit, accept and hold deposits. The remaining sections of this article shall apply to all Hawaii financial institutions and, to the extent permitted by federal law, to federal financial institutions which are authorized to solicit, accept and hold deposits in this State. (b) Other provisions of the laws of this State, including, but not limited to, chapter 490, the Uniform Commercial Code, chapter 551D, the Uniform Durable Power of Attorney Act, chapter 553A, Uniform Transfers to Minors Act, chapter 556, the Uniform Fiduciaries Act, chapter 560, the Uniform Probate Code, and any successor or similar acts shall also be applicable to deposits in this State. The rights, protections, releases and discharges of financial institutions with respect to its depositors or third parties contained in this article and other applicable laws shall be cumulative. [L 1993, c 350, pt of §1]

HRS §412:4-101 Forms of deposit

412:4-101. Forms of deposit (a) Except as specifically prohibited by federal law or any provision of this chapter, and subject to section 412:8-200 with respect to trust companies, section 412:9-400 with respect to depository financial services loan companies, and section 412:9-500 with respect to nondepository financial services loan companies, Hawaii financial institutions may open accounts and accept deposits therein of any type generally accepted by financial institutions in the United States. (b) Hawaii financial institutions may open accounts and accept deposits therein in the name of one or more persons, in the person's own right or in a fiduciary or other representative capacity, in any form of ownership not inconsistent with the laws of this State. [L 1993, c 350, pt of §1; am L 1995, c 55, §1]

HRS §412:4-102 Deposit account statements

412:4-102. Deposit account statements A Hawaii financial institution shall provide at least one of the holders of each deposit account with a statement in writing or by electronic means at least quarterly showing deposits, withdrawals, interest earned and the opening and closing balances of the account for the period of the statement; provided that quarterly statements need not be provided to any holders of passbooks or certificates of deposit or time deposit accounts, whether or not matured. [L 1993, c 350, pt of §1]

HRS §412:4-103 Statements presumed correct after one year; statute of limitations

412:4-103. Statements presumed correct after one year; statute of limitations (a) Any statement of account rendered by a financial institution to the account holder, and in the case of a multi-party account to any one holder, shall be conclusively presumed to be correct after one year from the date of its first rendition, and unless the holder has objected to such statement within such period, the account shall be deemed finally adjusted and settled. (b) Any legal action to correct the account not brought within one year shall be barred; provided, however, that the period for commencement of any legal action shall be extended for any length of time that the financial institution has been given notice by the account holder of any alleged error within said one-year period and the financial institution has not denied the account holder's objection to the correctness of the statement. (c) A statement of account shall be deemed to have been rendered when the financial institution has made a notation in the account holder's passbook, or has provided either a deposit account statement showing the balance of the account and the transactions since the last statement, or a written notice reasonably calculated to apprise the holder of such transactions and balance. (d) The account holder of an account has a duty to exercise reasonable care and diligence in examining any statement rendered by the financial institution, if any, and nothing in this section relieves the holder of such duty or from the consequences of neglecting such duty. [L 1993, c 350, pt of §1]

HRS §412:4-104 Federal deposit insurance required

412:4-104. Federal deposit insurance required No bank, savings bank, savings and loan association and depository financial services loan company which is a Hawaii financial institution shall accept deposits unless such deposits are insured to the extent allowed by the Federal Deposit Insurance Corporation or a successor agency. No credit union which is a Hawaii financial institution shall accept deposits or issue shares unless such deposits or shares are insured to the extent allowed by the National Credit Union Administration or a successor agency. [L 1993, c 350, pt of §1]

HRS §412:4-105 Accounts held in more than one name

412:4-105. Accounts held in more than one name Any deposit account held in the names of two or more persons may be paid, on request and according to its terms, to any one or more of the persons. A financial institution shall not be required to inquire as to the source of funds received for deposit to an account in the name of more than one person, or to inquire as to the proposed application of any sum paid from the account. Unless the terms of the deposit account clearly require the signature of more than one person for payment, transfer or withdrawal: (1) Payment, transfer or withdrawal of funds therefrom by or on the order of any of the persons shall release and discharge the financial institution from any liability for the paid, transferred or withdrawn funds with respect to all of the persons, and no action at law or equity may be maintained against the financial institution for payment, transfer or withdrawal made in accordance with this section; and (2) If the account is pledged, but not all the owners of the account sign the pledge, the pledge shall nevertheless be valid as to all funds in the account, and the pledge shall not operate to sever or terminate the form of multiple ownership of the account. [L 1993, c 350, pt of §1]

HRS §412:4-106 Fiduciary accounts

412:4-106. Fiduciary accounts A financial institution may open accounts and accept deposits therein in the name of a person as a trustee, personal representative, guardian, conservator, agent, custodian or other fiduciary for one or more other persons. Such accounts shall be subject to the following treatment: (1) If a financial institution has not received written notice and is not on actual notice that a fiduciary named on a deposit account has been removed, resigned, died or adjudicated an incapacitated person by a court of competent jurisdiction under applicable law, it may make payments or allow transfers or withdrawals from the account to or on the order of the fiduciary in accordance with the provisions of its contract with the account holder; (2) Any fiduciary who withdraws funds from a fiduciary account and whose name appears as a fiduciary on such account shall be presumed by the financial institution to be acting within the scope of any authority granted or belonging to the fiduciary. A payment, transfer or withdrawal from the account made by or on the order of the fiduciary payable to or for the benefit or account of the fiduciary or credited to the personal account of the fiduciary shall not be sufficient in the absence of actual knowledge on the part of the financial institution to charge it with a duty of inquiry or notice of any infirmity or defect in the right or title of the fiduciary to the funds paid, transferred or withdrawn; (3) If a financial institution pays funds or allows the transfer or withdrawal of funds from a fiduciary account according to the provisions of this section or other applicable law of this State, such payment, withdrawal or transfer shall operate to release and discharge the financial institution of any further liability to any person with respect to the funds so paid, transferred or withdrawn, and no action at law or equity may be maintained against the financial institution for payment, transfer or withdrawal made in accordance with this section; (4) A financial institution which pays or allows any transfer or withdrawal from a fiduciary account pursuant to this section shall not be liable for any estate taxes that may be due with respect to said account; (5) Notwithstanding the foregoing, trust accounts established by the financial institution meeting the definition of "trust account" in section 560:6-101 shall be subject to the treatment provided in article VI of chapter 560. [L 1993, c 350, pt of §1]

HRS §412:4-107 Accounts of minors

412:4-107. Accounts of minors A financial institution may open an account and accept deposits therein in the name of a minor in the same manner as for an adult and the deposit shall be held for the exclusive right and benefit of the minor, free from the control of any other person. All relations between the financial institution and the minor shall be on the same basis as though the minor were an adult, and any payment, transfer or withdrawal made to or on the order of the minor shall operate to release and discharge the financial institution for the paid, transferred or withdrawn funds with respect to all persons, and any pledge of the account by the minor shall be valid. Provided, however, that in case any guardian, conservator or trustee is appointed for the minor by a court having jurisdiction, the financial institution may pay over or credit to the guardian, conservator or trustee the deposit and interest or dividends pertaining thereto, and such payment or credit shall operate to release and discharge the financial institution from further liability to the guardian, conservator or trustee and to the minor with respect to the funds so paid or credited. No action at law or equity may be maintained against the financial institution for payment, transfer, withdrawal or pledge made in accordance with this section. [L 1993, c 350, pt of §1]

HRS §412:4-109 Checks drawn or transfers or withdrawals made by authorized persons

412:4-109. Checks drawn or transfers or withdrawals made by authorized persons Whenever a deposit account holder has authorized another person, whether as an agent, attorney-in-fact, officer, or in any other capacity, to draw checks on or make or order transfers or withdrawals from the account, the financial institution, in the absence of proper written notice to the contrary, shall be justified in presuming that any check drawn on the account or transfer or withdrawal made by or on the order of the authorized person in the form or manner authorized by the account contract, including payments, transfers or withdrawals made to or for the account and benefit of the authorized person, was paid or made for a purpose authorized by the account holder and within the scope of the authority conferred upon the authorized person. The death, disability or incapacity of the account holder does not revoke or terminate the authority granted by the holder as to the financial institution if, without actual knowledge of the death, disability or incapacity of the holder, the financial institution acts in good faith in accordance with the authorization. Any payment, transfer or withdrawal paid or allowed by the financial institution pursuant to this section shall release and discharge the financial institution from any liability to any person for the funds paid, transferred or withdrawn, and no action at law or equity may be maintained against the financial institution for payment, transfer or withdrawal in accordance with this section. [L 1993, c 350, pt of §1]

HRS §412:4-110 Checks drawn or transfers or withdrawals made by intoxicated persons

412:4-110. Checks drawn or transfers or withdrawals made by intoxicated persons It shall be lawful for any financial institution to refuse to pay any check, draft, order of transfer or withdrawal, or order drawn upon it when the officers or employees of the financial institution in good faith have reason to believe that the person signing or indorsing the instrument is or was so under the influence of alcohol, drugs or other intoxicating substances as to make it doubtful whether the person is or was at the time of signing or indorsing the instrument capable of intelligently transacting business; and no action at law or equity may be maintained against the financial institution or its officers or employees on account of any refusal pursuant to this section. [L 1993, c 350, pt of §1]

HRS §412:4-111 Accounts of deceased nonresidents

412:4-111. Accounts of deceased nonresidents A deposit held in a financial institution in the name of a person who dies while domiciled in another state, the District of Columbia and any territory or possession of the United States, leaving an estate in this State which exceeds $5,000 in net value, may be paid to the executor, administrator or other personal representative of the decedent appointed by a court of competent jurisdiction therein. Upon presentation of letters of administration or other documentation purporting to establish the appointment under the law of the decedent's domicile, the financial institution may make the payment without requiring the filing of ancillary proceedings in this State. Upon such payment, the financial institution shall be released and discharged of any further liability to any person with respect to the funds so paid, and no action at law or equity may be maintained against the financial institution for payment made in accordance with this section. [L 1993, c 350, pt of §1]

HRS §412:4-112 Pledging of assets

412:4-112. Pledging of assets (a) No financial institution shall give a preference to any depositor by pledging the assets of the financial institution, except as otherwise authorized by this chapter; provided that any financial institution may for any purpose borrow money and pledge or hypothecate its assets as collateral security therefor. (b) A financial institution may pledge its assets to secure deposits or borrowing of public funds. For purposes of this section, "public funds" means funds belonging: (1) To the State, if credited to the State or to the official credit of the director of finance; (2) To any county within the State, if credited to such county or to the official credit of the treasurer or similar fiscal officer of the county; (3) To the government of any state or foreign country, or any territory or possession thereof, or any of its political subdivisions, instrumentalities or municipalities, in which the pledging financial institution has a branch office, if credited to such government or to the official credit of the treasurer or similar fiscal officer thereof; (4) To the United States, if credited in such manner and under such rules and regulations as may be prescribed by the United States government. Once the financial institution has complied with all conditions necessary for the return of any assets it has pledged to secure the deposit or borrowing of the public funds, the government official in possession of such assets shall promptly return the same to the financial institution. If such assets are not so returned, the financial institution shall have its appropriate remedies at law and in equity, including, in the case of the State or any county of the State, the remedies under chapter 38; provided, that nothing in this subsection shall permit the avoidance of any requirements or liabilities imposed on the State or any county under chapter 38. [L 1993, c 350, pt of §1]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: https://www.capitol.hawaii.gov/hrscurrent/Vol08_Ch0401-0429/HRS0412/HRS_0412-.htmFetched: 11/10/2026