Utah’s Law of

Good funds

What are “good funds”?

The State of Utah defines good funds as money that has been “collected and cleared.” Ultimately, good funds are funds that have been received and cleared in a manner that an escrow officer can confidently disburse funds without worry of those funds being retracted or proven fraudulent. 

 The following are considered good funds and may be disbursed on the same day received:

·        Cash

·        Wire transfer (ABA)

·        A Cashier’s Check for less than $10,000 drawn on a federally insured bank

·        A check from the trust account of a broker in the transaction

·        A personal check for less than $500

·        A check from the trust account of another title company

What to know

First and foremost, an ACH transfer is NOT THE SAME as a wire (ABA) transfer. ACH transfers are retractable, and therefore are not considered to be good funds. American First Escrow and Title DOES NOT accept ACH transfers; these transfers will automatically be rejected without giving us notification, which could delay funding. 

One thing to keep in mind about checks is that, although checks may be presented and can technically be considered good funds (following guidelines), many title companies may not accept the check as good funds. When accepting a check, whether it be a cashier’s check or personal, the title company is facing the risk that the check may be counterfeit, or that there may be other issues with it. 

When receiving any form of check, especially when nearing settlement, American First Escrow and Title will NOT proceed with recording and funding a transaction dependent on funds received via check until funds have been verified and cleared our account. 

Please also note that although cash is technically considered to be good funds as well, many parties, primarily lenders, may not accept cash due to the inability to trace the source of funds.