IBA Compliance Connection

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We sell both money orders and cashier’s checks. Under the new Illinois unclaimed property law, should we apply a three year abandonment period to both products?

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No, we read the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) as imposing a three-year presumed abandonment period on cashier’s checks and a longer, seven-year presumed abandonment period on money orders.

The Illinois RUUPA defines “money order” as “a payment order for a specified amount of money” and refers to cashier’s checks as instruments “on which a financial organization or business association is directly liable.” We believe that if your bank sells money orders with the words “money order” printed on the face of the instrument, your bank should apply the longer, seven-year presumed abandonment period for those products. However, if your bank sells other “on-us” instruments as cashier’s checks, the shorter, three-year presumed  period would apply.

We should note that both the Illinois RUUPA’s definition of “money order” and its descriptive reference of a “cashier’s check” are overbroad and ambiguous — they both appear to include each other, notwithstanding they are different types of “on-us” instruments. The Illinois Treasurer’s office has opined to us that the shorter, three-year presumed abandonment period should apply to both types of on-us instruments due to this definitional ambiguity. However, we think there is a stronger argument that an on-us instrument that is sold and labeled as a money order clearly would fit the definition of a “money order,” and that such products are subject to the longer, seven-year presumed abandonment period that is expressly provided in the Illinois RUUPA.

For resources related to our guidance, please see:

  • Illinois RUUPA, 765 ILCS 1026/15-102(17) (“‘Money order’ means a payment order for a specified amount of money. The term includes an express money order and a personal money order on which the remitter is the purchaser.”)
  • Illinois RUUPA, 765 ILCS 1026/15-201(2) (“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: . . . (2) a money order, 7 years after issuance; . . .”)
     
  • Illinois RUUPA, 765 ILCS 1026/15-201(3) (“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: . . . (3) any instrument on which a financial organization or business association is directly liable, 3 years after issuance; . . .”)