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We are not currently charging a dormancy fee for our deposit accounts. Last year, we sent out a notice with a new fee schedule containing a new dormant account fee to all of our deposit account customers, and we provide this updated fee schedule when customers open a new account. Are we allowed to charge the new dormancy fee now that we have sent out this new fee schedule and provided more than thirty days’ notice? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

We are not currently charging a dormancy fee for our deposit accounts. Last year, we sent out a notice with a new fee schedule containing a new dormant account fee to all of our deposit account customers, and we provide this updated fee schedule when customers open a new account. Are we allowed to charge the new dormancy fee now that we have sent out this new fee schedule and provided more than thirty days’ notice?

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We believe that you may charge the new dormancy fee, but only if your customers have agreed in their account agreement to pay fees as described in your current fee schedule and the fee schedule specifies the time within which the new dormancy fee will be charged.

The Illinois Revised Uniform Unclaimed Property Act (RUUPA) states that the imposition of dormancy charges or escheat fees must be authorized by customers pursuant to a “valid contract.” We believe that if your account agreement provides for the imposition of fees as described on your current fee schedule and your fee schedule includes the new dormancy fee, then your fee would meet this requirement.

However, the Illinois RUUPA also requires that you specify the time within which a dormancy fee will be charged. Based on your description of the fee schedule, it is unclear whether your account agreement and fee schedule meet this requirement.

For resources related to our guidance, please see:

  • Illinois RUUPA, 765 ILCS 1026/15-602(a) (“A holder may deduct a dormancy charge or an escheat fee from property required to be paid or delivered to the administrator if: (1) a valid contract between the holder and the apparent owner authorizes imposition of the charge for the apparent owner’s failure to claim the property within a specified time; and (2) the holder regularly imposes the charge and regularly does not reverse or otherwise cancel the charge.”)
  • Illinois RUUPA, 765 ILCS 1026/15-602(b) (“The amount of the deduction under subsection (a) is limited to an amount that is not unconscionable considering all relevant factors, including the marginal transactional costs incurred by the holder in maintaining the apparent owner’s property and any services received by the apparent owner.”)