No, in our view it is not necessary to obtain written consent for an automatic renewal immediately before the initial maturity date of a CD (although this may be a good practice). Even if no consent for renewal is obtained at or about the time of a CD’s automatic renewal, the presumption of abandonment and your reporting obligation for the CD only arises three years after its initial maturity date, and not before, during which time any “indication of interest” (discussed below) in the renewed CD would overcome a presumption of its abandonment.

Put another way, any “indication of interest” by the customer will delay the start date for measuring a CD’s presumed abandonment period for three years following the indication of interest. In such cases, it is not necessary to obtain written consent from the customer for renewals in order to avoid a presumption of abandonment – again, for three years following the last indication of interest. An indication of interest could include any written communication to the bank from the customer, any oral communication with your customer (provided your bank “contemporaneously makes and preserves a record” of the oral communication), and even your customer logging into an online banking portal to check the CD balance. Additionally, the Illinois RUUPA treats a CD as an active account if there are other active accounts at your institution sharing the same mailing address. For example, if the customer increases or decreases amounts in a deposit account or makes a loan payment, the customer’s CD also would be treated as an active account, even when automatically renewing.

Based on our reading of the Illinois RUUPA, we do not recommend using the date of death as the last indication of interest for a CD when a CD customer dies; rather, we recommend using the date of the last actual indication of interest in the CD as the start date for measuring the presumed abandonment period. If this would result in more than two years beyond the customer’s death for the presumed abandonment period, then the period would shrink to two years as measured from the date of the last indication of interest.

Also, we should note that after a CD customer’s death, the CD’s “owner” may be a payable on death (POD) beneficiary, a surviving joint owner, or a legal representative of the customer’s estate, such as an executor or administrator. In such cases, the bank should look to these individuals or entities for any future indications of interest that would prevent the presumed abandonment period from running for the CD.

For resources related to our guidance, please see:

• Illinois RUUPA, 765 ILCS 1026/15-210(a) (“The period after which property is presumed abandoned is measured from the later of: (1) the date the property is presumed abandoned under this Article; or (2) the latest indication of interest by the apparent owner in the property.”)

• Illinois RUUPA, 765 ILCS 1026/15-201(6) (“When property presumed abandoned. Subject to Section 15-210, the following property is presumed abandoned if it is unclaimed by the apparent owner during the period specified below: . . . (6) a demand, savings, or time deposit, 3 years after the later of maturity or the date of the last indication of interest in the property by the apparent owner, except for a deposit that is automatically renewable, 3 years after its initial date of maturity unless the apparent owner consented in a record on file with the holder to renewal at or about the time of the renewal; . . .”)

• Illinois RUUPA, 765 ILCS 1026/15-210(b) (“Under this Act, an indication of an apparent owner’s interest in property includes: . . . (2) an oral communication by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held, if the holder or its agent contemporaneously makes and preserves a record of the fact of the apparent owner’s communication; . . .”)

• Illinois RUUPA, 765 ILCS 1026/15-210(b) (“Under this Act, an indication of an apparent owner’s interest in property includes: . . . (4) activity directed by an apparent owner in the account in which the property is held, including accessing the account or information concerning the account, or a direction by the apparent owner to increase, decrease, or otherwise change the amount or type of property held in the account; . . .”)

• Illinois RUUPA, 765 ILCS 1026/15-210(f) (“If the apparent owner has another property with the holder to which Section 201(6) applies, then activity directed by an apparent owner in any other accounts, including loan accounts, at a financial organization holding an inactive account of the apparent owner shall be an indication of interest in all such accounts if: (A) the apparent owner engages in one or more of the following activities:

(i) the apparent owner undertakes one or more of the actions described in subsection (b) of this Section regarding any account that appears on a consolidated statement with the inactive account;

(ii) the apparent owner increases or decreases the amount of funds in any other account the apparent owner has with the financial organization; or

(iii) the apparent owner engages in any other relationship with the financial organization, including payment of any amounts due on a loan; and

(B) the foregoing apply so long as the mailing address for the apparent owner in the financial organization’s books and records is the same for both the inactive account and the active account.”)

• Illinois RUUPA, 765 ILCS 1026/15-201 (“Notwithstanding anything to the contrary in this Section 15-201, and subject to Section 15-210, a deceased owner cannot indicate interest in his or her property. If the owner is deceased and the abandonment period for the owner’s property specified in this Section 15-201 is greater than 2 years, then the property, other than an amount owed by an insurance company on a life or endowment insurance policy or an annuity contract that has matured or terminated, shall instead be presumed abandoned 2 years from the date of the owner’s last indication of interest in the property.”)

• Illinois RUUPA, 765 ILCS 1026/15-102(21) (“‘Owner’, unless the context otherwise requires, means a person that has a legal, beneficial, or equitable interest in property subject to this Act or the person’s legal representative when acting on behalf of the owner. The term includes: . . . (B) a beneficiary, for a trust other than a deposit in trust; . . .”)