Our institution sells two types of instruments, money orders and cashier’s checks. We sell money orders in amounts up to $2,500 and cashier’s checks for larger amounts. For cashier’s checks, we print the payee on the check, but for money orders, the payee is blank. When these products become unclaimed property, who should we report as the owner? We currently report cashier’s checks as owned by the payee and money orders as having unknown owners.

We believe that your bank may continue to report the owner of these instruments as the payee, if the payee is known. For money orders that are sold with a blank payee line, we believe that reporting the owner as “unknown” would be acceptable.

The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires property holders to report the property’s “apparent owner” if known, but there is an exception to this requirement “for a traveler’s check, money order, or similar instrument.”

An apparent owner is the person appearing in your bank’s records as the property’s owner (your bank is not required to investigate ownership beyond its own books and records). An “owner” is a person with a legal, beneficial or equitable interest in property, including a payee on an instrument. But the term “owner” also could include the holder of a cashier’s check or money order that has not yet been delivered to the payee.

We spoke with an attorney with the Illinois Treasurer’s office about identifying the apparent owner of cashier’s checks and money orders. Their experience has been that most financial institutions report cashier’s checks with both the payee’s name and the purchaser’s name listed as owners (although the attorney acknowledged that this is not required). Consequently, we believe it would be acceptable to continue your bank’s practice of reporting a cashier’s check’s apparent owner as the payee, and a money order’s apparent owner as “unknown,” particularly because you are not required to report an owner’s name for money orders and “similar instruments.”

Note that if your bank reports and remits a cashier’s check or money order to the Treasurer, there may be instances in which such instrument later is deposited and must be paid by your bank, resulting in a double payment on the instrument (one to the Treasurer, one to the owner). In that case, your bank must file a claim with the Illinois Treasurer for reimbursement, with “proof that the instrument was presented and payment was made to a person the holder reasonably believed entitled to payment.” The Treasurer’s office will then have match your claim with the records that your bank originally submitted when reporting and remitting the instrument. It may be prudent to monitor this reimbursement process to ensure that your bank is providing enough information to the Treasurer’s office so that it can successfully claim reimbursement in these situations.

For resources related to our guidance, please see:

Illinois RUUPA, 765 ILCS 1026/15-402(a)(4) (A holder’s report must “(4) except for a traveler’s check, money order, or similar instrument, contain the name, if known, last-known address, if known, and Social Security number or taxpayer identification number, if known or readily ascertainable, of the apparent owner of property with a value of $5 or more.”)

Illinois RUUPA, 765 ILCS 1026/15-102(3) (“‘Apparent owner’ means a person whose name appears on the records of a holder as the owner of property held, issued, or owing by the holder.”)

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: . . . (C) a creditor, claimant, or payee, for other property; and (D) the lawful bearer of a record that may be used to obtain money, a reward, or a thing of value.”)

Illinois RUUPA, 765 ILCS 1026/15-605(a) (“A holder that under this Act pays money to the administrator may file a claim for reimbursement from the administrator of the amount paid if the holder: (1) paid the money in error; or (2) after paying the money to the administrator, paid money to a person the holder reasonably believed entitled to the money.”)

Illinois RUUPA, 765 ILCS 1026/15-605(b) (“If a claim for reimbursement under subsection (a) is made for a payment made on a negotiable instrument, including a traveler’s check, money order, or similar instrument, the holder must submit proof that the instrument was presented and payment was made to a person the holder reasonably believed entitled to payment. The holder may claim reimbursement even if the payment was made to a person whose claim was made after expiration of a period of limitation on the owner’s right to receive or recover property, whether specified by contract, statute, or court order.”)