Arizona Policy Decisions & Credit Union Compliance

Session Summary

On June 27, 2025, the Arizona Legislature sine die adjourned, bringing an end to the 166-day legislative session that kicked off on January 13, 2025. “Sine die,” Latin for “without a day,” is the final action usually taken by both the Arizona House of Representatives and Senate, which signals the close of the legislative session for that year.

Of the 2025 Arizona legislative session over 1,700 bills introduced between the House and the Senate, 439 were passed by the legislature. 265 were signed into law and 174 were vetoed by the Governor.

Compliance Notes for Legislation of Interest for Credit Unions

During the 2025 session, several bills were passed that will have implications for credit unions and their operations.

HB 2116 – Small Estate; Affidavit; Limits

This bill makes changes to the threshold value of estates of deceased for which a small estate affidavit can be used to claim without the heir having to go through the probate process and obtain letters from the court naming them as personal representative of the estate.

Small estate affidavits can be used after the effective date of the legislation if the value of the personal property is less than $200,000 and the value of the real property is less than $300,000. This increases from the previous threshold of $75,000 for personal property and $100,000 for real property.

Credit unions will want to update their procedures for handling the estate of deceased members accordingly, and train staff on the new thresholds.

Where can I read the bill for myself?

The bill can be found on the Arizona State Legislature’s website here.

When does the bill become effective?

HB 2116 goes into effect Sept. 26, 2025.

SB 1540 – Homestead; Personal Property; Exemptions
The bill amends the existing homestead exemption from attachment, execution and forced sale not to exceed $400,000 in value.

The exemption now includes a mobile home, park model trailer, motor home, travel trailer, fifth wheel trailer, houseboat, manufactured home or other form of shelter in which the person resides plus the land on which that shelter is located.

In addition, the bill adds all federal or state personal income tax credits from any federal or state earned income tax credits or federal or state child tax credits to property of a debtor that is exempt from execution, attachment or sale on any process issued from any court. The amount of the exemption will be the lesser of the total combined amount of any federal or state tax refunds or the total combined amount of any federal or state earned income tax credits and any federal or state child tax credits claimed on the return.

As before this change, upon service of a garnishment, the credit union must not pay or deliver to the judgment debtor (member being garnished) any monies or personal property which is not exempt. The credit union must also make available to the debtor up to $5,000 from one account, unless ordered to not make it available by a court.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
SB 1540 goes into effect Sept. 26, 2025.

HB 2345 – Loan Agreements; Escrow
The bill stipulates that an escrow agent may only use monies in an escrow account to make onetime payment or multiple payments per a loan agreement unless one of the following conditions applies:

The loan agreement specifically states that the monies may be used for another purpose and that purpose is expressly stated in the loan agreement;

A deed in lieu of foreclosure agreement specifically states that the monies may be used for another purpose and that purpose is stated in the deed in lieu of foreclosure agreement;

An agreement is entered into by parties to negotiate a settlement of the loan and that agreement includes a provision for the use of the monies; or

An agreement is entered into by the parties that provides for a portion of the escrow account to be used to bring the account that is in arrears to a current status.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
HB 2345 goes into effect on Sept. 26, 2025.

HB 2368 – Auditor General; Records; Financial Institutions
The bill will affect credit unions which hold public deposits in Arizona. It allows the Auditor General or the Auditor General’s authorized representative to have access to the records of any state agency, board, commission, department, institutions, program, advisory council, advisory committee, or political subdivision of Arizona for which the credit union holds an account for.

On request from the Auditor General or Auditor General’s authorized representative, credit unions will need to provide all information requested, and an authorized representative of the credit union will need to certify the information.

Costs and fees associated with producing the information requested shall be paid for by the state agency, board, commission, department, institutions, program, advisory council, advisory committee, or political subdivision to which the account belongs.

In addition, the credit union will not be liable to the state agency, board, commission, department, institutions, program, advisory council, advisory committee, or political subdivision for providing the information pursuant to the Auditor General or Auditor General’s authorized representative’s request.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
HB 2368 goes into effect Sept. 26, 2025.

SB 1206 – Banks; Special Deposits; Requirements
This bill creates the Uniform Special Deposits Act (Act) within Arizona statute. The Act provides statutory clarity on what may be considered a special deposit, establishes that a special deposit is a debt owed to the beneficiary, establishes that neither the depositor or the beneficiary has a property interest in a special deposit, establishes restrictions around a special deposit during a creditor process, and clarifies the rights of a bank to seek recoupment for a debt—or a right to set off—when holding a special deposit.

A special deposit is:

A deposit of funds in a bank under an account agreement;

For the benefit of at least two beneficiaries, one of which may be the depositor;

Denominated in a medium of exchange currently authorized or adopted by a domestic or foreign government;

For a permissible purpose stated in the account agreement; and

Subject to a contingency.

Special deposit accounts are entirely optional for credit unions. Credit unions considering opening a special deposit account should perform due diligence and consult with legal counsel prior to opening the account.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
SB 1206 goes into effect Sept. 26, 2025.

Awareness Notes for Legislation of Interest for Credit Unions

In addition, while not having direct credit union implications, a number of bills passed that credit unions may wish to be aware of.

HB 2344 – Notaries; Businesses; Prohibition
The bill stipulates that if a business entity does not provide a free option to notarize documents at a physical location, individuals needing a notarization may use the services of any other notary within the state.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
HB 2344 goes into effect Sept. 26, 2025.

HB 2387 – Cryptocurrency Kiosk; License; Fraud Prevention
The bill does not have any credit union implications but pertains to cryptocurrency kiosk operators and potentially will help reduce instances of fraud against credit union members.

The cryptocurrency kiosk operators must provide disclosures and warnings which a customer must accept before executing a cryptocurrency kiosk transaction.

Disclosure #1
Warning: Consumer fraud often starts with contact from a stranger who is initiating a dishonest scheme or a criminal or fraudulent activity that may appear in many forms, including any of the following:

Claims of a frozen bank account or credit card;

Claims of a fraudulent bank transaction;

Claims of identity theft or an offer of employment in exchange for payment;

Requests for a payment to a government agency or company;

Requests for disaster relief donations or loans;

Offers to purchase lottery tickets or sweepstakes or drawings for vehicles;

Prompts to click on desktop pop-ups that include virus warnings or communication from alleged familiar merchants; or

Communication from someone impersonating a representative of your bank or a law enforcement officer.

If you believe you have been scammed, stop and call your local law enforcement and the cryptocurrency kiosk operator.

Disclosure #2
Warning: Losses due to fraudulent or accidental transactions in virtual currency are irreversible. People may use virtual currency transactions to steal your money by impersonating the government, organizations, or people you know. Impersonators may threaten jail time, say your identity has been stolen, allege your computer has been hacked, insist you withdrawal money from your bank account to purchase virtual currency or use a number of other scams. Do not disclose your private key that is associated with your virtual wallet to a third party.

If you believe you have been scammed, stop and call your local law enforcement and the cryptocurrency kiosk operator.

In addition, the bill creates licensing requirements for cryptocurrency kiosk operators, receipt requirements, and requirements to minimize fraud.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
HB 2387 goes into effect Sept. 26, 2025.

SB 1295 – Fraudulent Voice Recordings
The bill amends the classification of acts of criminal impersonation by adding using a computer-generated voice recording, image, or video of another person with the intent to defraud other persons. Defraud means to make a false presentation or material omission to deceive another person to gain benefit.

Comedy, parody, artistic expression, criticism, or circumstances where it is clear to a reasonable listener or viewer that the recording, image or video has been digitally manipulated are not fraudulent.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
SB 1295 goes into effect Sept. 26, 2025.

SB 1351 – Gift Cards; Theft; Forgery
Creates the definition of gift card theft, class 4 felony, in the Arizona criminal code. A person commits gift card theft if, with the intent to defraud, the person knowingly does any of the following:

Acquires possession of a gift card or gift card information without the consent of the gift card holder, issuer, or seller;

Acquires possession of a gift card or gift card information by exploiting the gift card holder, issuer, or seller; or

Obtains money, goods services, or anything else of value with a gift card or gift card information that was acquired without the consent of the gift card holder, issuer, or seller.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?
SB 1351 goes into effect Sept. 26, 2025.

SB 2303 – Total Loss Vehicle; Electronic Signatures
The measure provides that a power of attorney for vehicle title purposes involving a total loss vehicle settlement with a licensed insurance company may be signed electronically and printed on a hard copy.

Where can I read the bill for myself?
The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?

HB 2303 goes into effect Sept. 26, 2025.

SB 2054 – Difi: Financial Enterprises; Insurance; Compact

The measure makes several amendments to statute related to licensed consumer lenders (not credit unions), licensed money transmitters, and insurers.

The largest change will require homeowners' insurers to report policy information on each homeowners' insurance policy the insurer has in force during the prior calendar year in geographic areas in Arizona that have heightened fire risks.

The fire insurance review task force will be established to review the information provided by the homeowners insurers.

Where can I read the bill for myself?

The bill can be found on the Arizona Legislature’s website here.

When does the bill become effective?

HB 2054 goes into effect Sept. 26, 2025.