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The basics:

• Sen. Vin Gopal proposes directing state settlement escrow funds to NJ banks
• Plan would require at least 50% of eligible settlement funds to remain in-state
• Proposal follows major settlements involving PFAS, environmental claims
• Says the measure would boost local lending, jobs, economic growth

The success of several lawsuits initiated by the State of New Jersey has highlighted a historic opportunity to better ensure that state settlement proceeds generate the best possible value for our residents, businesses, and communities. The settlement agreements of some of the most recent lawsuits are substantial.

Last year, the Chemours Co., DuPont de Nemours Inc., and Corteva Inc. announced an $875 million dollar settlement with New Jersey to comprehensively resolve all pending environmental and other claims, such as those related to PFAS (per- and polyfluoroalkyl substances, or forever chemicals). The settlement calls for annual payments by wire transfer to an escrow account with a mutually agreed upon bank over the next 24 years.

Similarly, the New Jersey Department of Environmental Protection has reached a $49.5 million settlement with Pechiney Plastics Packaging Inc., Bristol-Myers Squibb Co., Citigroup Inc., and others to also be paid out by wire transfer to an escrow account.

These settlement agreements are significant, and if kept within New Jersey’s banking system, administered through a transparent framework, would enhance our state’s ability to multiply economic impact while maintaining accountability and oversight.

Keeping it local

Consider the July 2025 landmark settlement between the New Jersey Department of Environmental Protection and 3M. This $450 million settlement will be paid out over the next 25 years to resolve widespread PFAS contamination claims. Most, if not all, settlement agreements allow for both the defendant and the plaintiff to set up an escrow with a mutually agreed upon bank. It is our understanding that often the defendant and/or their lawyers, not the state, appoint large global banks to serve as escrow agents, which was the case in this lawsuit.

Qualified New Jersey banks that have the expertise to provide the necessary services should have the opportunity to hold these escrow funds. Which is why we are proposing legislation that requires New Jersey based banks with the product capabilities, experience, and size be appointed as escrow agents for pending and future settlements.

Under our proposal, the largest prudent percentage, no less than 50% would be required to be funded to qualified New Jersey banks. This will ensure that New Jersey, not just out-of-state financial institutions, capture the financial, social, and economic benefits of its own settlements. The nation’s and world’s largest banks would still continue to compete but would not have an unfair advantage because of their heft or relationships. This proposal does not exclude the larger banks but rather ensures that New Jersey banks participate in a fair percentage.

Deposits to regional and local banks generate increased opportunities for local lending to our small businesses.

Deposits to regional and local banks generate increased opportunities for local lending to our small businesses. It means better positioning communities to address affordable housing demands and community needs. Larger banks doing business nationally and internationally may loan the money out of state if it is to their advantage. Our proposal would make the legislative change necessary to ensure that settlements awarded the state remain within New Jersey’s economy.

This proposal allows an innovative way of addressing the State’s financial difficulties without raising taxes. It is pro-New Jersey, pro-business, and pro-jobs. Let’s keep settlements owed the residents of New Jersey here for their benefit.

State Sen. Vin Gopal, D-11th District, serves as Senate majority whip and chair of the Senate Education Committee.