Escrow

[pjjjjj]

I wanted to reply in another thread, but I can't, so I started a new one. It was in regard to tblount's comparison of 2 carriers, and revenue, expenses, and bottom line.
I just wanted to point out that escrow shouldn't be factored in as an 'expense', because it is more like a 'savings account', it is still your money, until it is spent.
If one company deducts $100/month for escrow, and another deducts $200/month, one deducts up to $1000, and one to $2000, you end up with a different cash flow, but not with a different net profit.
The escrow is a prepaid expense, or a security deposit, which you will get back when you leave, unless it is used. Or at least that's how it's supposed to work.

 

[greg334]

Yep you're right, Escrow is taken out and put in a interest bearing account. Just like a savings account.

 

[pjjjjj]

I didn't realize they gave you interest, but if they're receiving it on your monies, it should be yours too.

 

[flattop40]

Actually most escrow accounts are non-interest bearing.

 

[mcclain]

Escrow monies should 100% not be viewed as an expense, but like stated, as a FUTURE savings.

Keep your marbles in line - its' not all that bad of a little required program that most carriers have.

 

[greg334]

Escrow -

376.12 -

(k) Escrow funds — If escrow funds are required, the lease shall specify:

(k)(1) The amount of any escrow fund or performance bond required to be paid by the lessor to the authorized carrier or to a third party.


(k)(2) The specific items to which the escrow fund can be applied.


(k)(3) That while the escrow fund is under the control of the authorized carrier, the authorized carrier shall provide an accounting to the lessor of any transactions involving such fund. The carrier shall perform this accounting in one of the following ways:


(k)(3)(i) By clearly indicating in individual settlement sheets the amount and description of any deduction or addition made to the escrow fund; or


(k)(3)(ii) By providing a separate accounting to the lessor of any transactions involving the escrow fund. This separate accounting shall be done on a monthly basis.


(k)(4) The right of the lessor to demand to have an accounting for transactions involving the escrow fund at any time.


(k)(5) That while the escrow fund is under the control of the carrier, the carrier shall pay interest on the escrow fund on at least a quarterly basis. For purposes of calculating the balance of the escrow fund on which interest must be paid, the carrier may deduct a sum equal to the average advance made to the individual lessor during the period of time for which interest is paid. The interest rate shall be established on the date the interest period begins and shall be at least equal to the average yield or equivalent coupon issue yield on 91–day, 13–week Treasury bills as established in the weekly auction by the Department of Treasury.


(k)(6) The conditions the lessor must fulfill in order to have the escrow fund returned. At the time of the return of the escrow fund, the authorized carrier may deduct monies for those obligations incurred by the lessor which have been previously specified in the lease, and shall provide a final accounting to the lessor or all such final deductions made to the escrow fund. The lease shall further specify that in no event shall the escrow fund be returned later than 45 days from the date of termination.

 

[ClassicOne]

I was just reviewing some of the leases I have been privy to. Only one is paying interest. I agree that the truth in leasing laws are very detailed as to escrow accounts, but some leases use differing terms to identify escrow. Reserve, sign on fees, emergency funds..etc. But, in all of the "non named" escrow accounts, they are used for the same or similar purposes. I'm confused as to why. OOIDA has brought lawsuits over mismanagement of escrow accounts. Are these "non named" accounts not escrow by virtue of their names?

 

[TeamCaffee]

We receive interest on our Escrow account. Not much as I am sure it is the same as a passbook savings account.

 

[RLENT]

I agree that the truth in leasing laws are very detailed as to escrow accounts, but some leases use differing terms to identify escrow. Reserve, sign on fees, emergency funds..etc. But, in all of the "non named" escrow accounts, they are used for the same or similar purposes. I'm confused as to why. OOIDA has brought lawsuits over mismanagement of escrow accounts. Are these "non named" accounts not escrow by virtue of their names?

I suspect, from a legal perspective, that whatever you wish to call it has little bearing on whether it is legally an escrow account by definition.

To put it another way: A pig with lipstick on it is ...... still a pig with lipstick on it - no matter if you name it Marilyn Monroe or Cindy Crawford or something else ......

Or yet another: If it quacks like a duck then ........

I have little doubt that as a matter of course, a carrier representative who is personally ignorant of the regs might well tell you that it is not escrow ..... because that's not what it is being called, or because someone else in the company (probably higher up the food chain) has told them that it "isn't escrow" ........

The degree to which you can get compliance on a carrier paying interest is probably largely dependent on how willing you are to go to the mat, in terms of pressing the issue legally.

 

[OntarioVanMan]

My last carrier had a waiver of interest clause..in the contract...Please read the small print.

 

[RLENT]

OVM,

Read point (k)(5) in Greg's recitation of the regs above ..... and then ask an attorney what the legal meaning of shall is ......

Shall is not "may", "can", "should", "outta", or some other word ..... shall is shall .... there isn't an option or a choice provided to the carrier ..... they are legally obligated to pay interest ....

 

[BillChaffey]

I would expect Escrow laws vary from State to State, probably from Carrier to Carrier. As far a Panther 11, if you leave early even when it seems amicable to both parties Panther 11 keeps all the Escrowed monies.

 

[RLENT]

I would expect Escrow laws vary from State to State, probably from Carrier to Carrier.

Uhhh .... there may well be laws that vary state to state ..... but probably not carrier to carrier .....

Anyways, the regs that greg quoted are Federal regs ..... it's a 50 state thang .....

As far a Panther 11, if you leave early even when it seems amicable to both parties Panther 11 keeps all the Escrowed monies.

Factually untrue ..... Jim and Arlene left Panther and received all the escrow back if I recall correctly.

 

[LDB]

No, Panther does not automatically keep all your escrow money under any circumstances. The escrow is intended for specific circumstances and in those specific circumstances an amount of escrow needed to cover the situation will be withheld and the remainder returned.

 

[OntarioVanMan]

If you do cross border they will hold it longer to see if any fines from Canada customs or the DHS show up...

 

[ClassicOne]

With the Federal regulations so specific, why do carriers continue to dance around the subject? It would be very interesting to compare a dozen current leases to see how they approach the issue. As we speak, CR England is doing some historical accounting mandated by a Federal court to address escrow issues dating from their lease agreement prior to 2002! I have an older lease from a now gone company that read just like the clauses in the regulations. Why all of them aren't like this one is disappointing.

 

[BillChaffey]

Mr. Rlent,
"Factually untrue" I drove for Panther 11 from August 2007 until early December 2007. When I informed my Team leader I was going to leave he said no problem nice to know you. When I asked for the escrowed monies (twice) I was told both times "NO way!" Panther 11, still has my money.

 

[Turtle]

If they still have your escrow, then there is, without question, more to the story.

As a side note, who is Panther Eleven? Did they hit the Bellagio, too? The name of the Carolina football team's starting lineup? Maybe Obama's Secret Service nickname? Or is it how many loads Panther Expedited Services has booked this week?

 

[Bruno]

If they still have your escrow, then there is, without question, more to the story.

As a side note, who is Panther Eleven? Did they hit the Bellagio, too? The name of the Carolina football team's starting lineup? Maybe Obama's Secret Service nickname? Or is it how many loads Panther Expedited Services has booked this week?

Turtle skrikes again. Maybe it's 11 drivers from Panther having a party at the Bellagio. lol

 

[BillChaffey]

As far as Panther 11 goes it sure looks like two ones to me on the Van of "Easyrider2697" Truck. As far as the rest of the Story, Panther took $18.00 a week from my pay for "Workman's Compensation" saying it was required by law. This is false. The Insurance Company Zurich which wrote the policy Say's on the very first page in at least 14 point letters "This is not workmen's Compensation and should not be considered as such". When I asked for it not to be taken from my pay Panthers response was "Don't drive" So I stopped. Twice I asked for my escrow and was told you failed to fulfil your contract, which is fine. It should have nothing to do with escrow. I expect Panther makes out pretty good with the turn over they have.