Our safety deposit box contract states that in cases of delinquencies, we may debit any of the customer’s accounts and access our customers’ boxes to collect their contents to satisfy delinquent rental payments, provided that we give our customers thirty days’ notice. What Illinois law or regulation allows this practice?

We believe that Illinois law would allow a bank to apply a valid right of setoff to recover delinquent safety deposit box rental payments. Illinois courts have long confirmed banks’ setoff rights, which can arise either contractually (when a loan agreement or account agreement provides for a right of setoff) or under common law when there is “mutuality” of parties (the account is owned by the same party that owes the matured debt to the bank).

Additionally, we are not aware of any Illinois law or regulation expressly addressing the opening of safety deposit boxes and using their contents to satisfy delinquent rental payments. Consequently, we believe your right to open boxes and collect your customers’ property to recover delinquent rental payments depends on your contract with your customer.

If the rental payments have been delinquent for several years, the Illinois Revised Uniform Unclaimed Property Act (RUUPA) may be relevant. Under that law, tangible property held in a safety deposit box is presumed abandoned five years after the expiration of the box’s lease or rental period and must be remitted to the State Treasurer. However, property removed from a safety deposit box and delivered to the Treasurer is “subject to the holder’s right to reimbursement for the cost of opening the box and a lien or contract providing reimbursement to the holder for unpaid rent charges for the box.” Consequently, “upon application by the holder, and after there are sufficient cash funds available either from the contents of the box or the sale of the property, the administrator shall reimburse the holder from the proceeds.”

For resources related to our guidance, please see:

Symanski v. First Nat. Bank of Danville, 242 Ill.App.3d 391, 396–397 (4th Dist. 1993) (“There are two bases on which defendant could assert a right of setoff . . . Under common law, a bank has the power to apply the deposit to the payment of such depositor’s indebtedness only when there are mutual demands and debts between the parties, and this right of setoff arises at the time the depositor’s indebtedness to the bank has matured. . . . As evidenced by our previous discussion, parties can contractually agree to a right to set off.”)

Illinois RUUPA, 765 ILCS 1026/15-205 (“Tangible property held in a safe-deposit box are presumed abandoned if the property remains unclaimed by the apparent owner 5 years after the expiration of the lease or rental period for the box.”)

Illinois RUUPA, 765 ILCS 1026/15-606 (“Property removed from a safe-deposit box and delivered under this Act to the administrator under this Act is subject to the holder’s right to reimbursement for the cost of opening the box and a lien or contract providing reimbursement to the holder for unpaid rent charges for the box. Upon application by the holder, and after there are sufficient cash funds available either from the contents of the box or the sale of the property, the administrator shall reimburse the holder from the proceeds. The administrator shall promulgate administrative rules concerning the reimbursement process under this Section.”)