IBA Compliance Connection

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Do you know if the recent amendments to the Illinois Revised Uniform Unclaimed Property Act (RUUPA) changed how we should handle dormant accounts?

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The Illinois RUUPA was recently amended by Public Act 102-288, signed into law on August 6, 2021. To summarize, the Public Act:

  • Amends the definition of virtual currency, sets the presumed abandonment period for virtual currency as five years, and explains how virtual currency should be delivered to the Treasurer if abandoned.
  • Shortens the presumed abandonment period for money orders from seven to five years after issuance.
  • Lengthens the presumed abandonment period for automatically renewing time deposits from three years after the initial term to three years after the initial term plus one automatic renewal term.
  • Expands the “linked accounts” rule slightly by allowing an apparent owner to indicate interest in their deposit accounts and avoid abandonment when they take qualifying actions on “any other accounts” they have with the same financial organization. Previously, the accounts had to appear on the same consolidated statement.
  • Clarifies language that allows holders to delay reporting and delivering abandoned automatically renewable time deposits to the State Treasurer when doing so would result in a penalty or forfeiture in the payment of interest.
  • Restates the Treasurer’s authority to examine national banks and other federal charters if the Treasurer “has a reason to believe that a financial organization is not in compliance” with RUUPA.

Additionally, your customers may be interested to know that the Public Act:

  • Modifies the payment of interest on time deposits in the Treasurer’s possession.
  • Requires certain business associations to make negative reports of property presumed abandoned even if they have no reportable property.
  • Allows the Treasurer to use information from the State Board of Elections and Secretary of State to identify abandoned property owners.

For resources related to our guidance, please see:

  • Illinois RUUPA, 765 ILCS 1026/15-102(32) (“‘Virtual currency’ means any type of digital unit, including cryptocurrency, used as a medium of exchange, unit of account, or a form of digitally stored value, which does not have legal tender status recognized by the United States. The term does not include:

(A) the software or protocols governing the transfer of the digital representation of value;

(B) game-related digital content; or

(C) a loyalty card or gift card.”)

  • Illinois RUUPA, 765 ILCS 1026/15-201 (“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, 5 years after issuance; . . .

(6) financial organization deposits as follows:

  • (i) a demand deposit, 3 years after the date of the last indication of interest in the property by the apparent owner;
  • (ii) a savings deposit, 3 years after the date of last indication of interest in the property by the apparent owner;
  • (iii) a time deposit for which the owner has not consented to automatic renewal of the 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;
  • (iv) an automatically renewable time deposit for which the owner consented to the automatic renewal in a record on file with the holder, 3 years after the date of last indication of interest in the property by the apparent owner, following the completion of the initial term of the time deposit and one automatic renewal term of the time deposit;

(6.5) virtual currency, 5 years after the last indication of interest in the property; . . .”)

  • Illinois RUUPA, 765 ILCS 1026/15-603(i) (“If property reported to the administrator is virtual currency, the holder shall liquidate the virtual currency and remit the proceeds to the administrator. The liquidation shall occur anytime within 30 days prior to the filing of the report under Section 15-401. The owner shall not have recourse against the holder or the administrator to recover any gain in value that occurs after the liquidation of the virtual currency under this subsection.”)
  • 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 of the other accounts the apparent owner has with the financial organization; . . .”)
  • Illinois RUUPA, 765 ILCS 1026/15-603(b) (“If property in a report under Section 15-401 is an automatically renewable time deposit and the holder determines that a penalty or forfeiture in the payment of interest would result from paying the deposit to the administrator at the time of the report, the date for reporting and delivering the property to the administrator is extended until a penalty or forfeiture no longer would result from delivery of the property to the administrator. The holder shall report and deliver the property on the next regular date prescribed for reporting by the holder under this Act after this extended date, and the holder shall indicate in its report to the administrator that the property is being reported on an extended date pursuant to this subsection (b).”)
  • Illinois RUUPA, 765 ILCS 1026/15-1002.1(c) (“Notwithstanding Section 15-1002, the administrator may, at reasonable times and upon reasonable notice:
     

    (1) examine the records of a financial organization that is a federally chartered bank, savings bank, or credit union if the administrator has reason to believe that the financial organization has failed to comply with this Act;

    (2) issue an administrative subpoena requiring the financial organization or an agent of the financial organization to make records available for examination; and

    (3) bring an action seeking judicial enforcement of the subpoena.

    The administrator may adopt administrative rules that specify conditions under which the administrator has a reason to believe that a financial organization is not in compliance with this Act.”)
     

  • Illinois RUUPA, 765 ILCS 1026/15-607 (“(a) If property other than money is delivered to the administrator, the owner is entitled to receive from the administrator income or gain realized or accrued on the property before the property is sold.

    (b) Before August 22, 2017, interest on money is not payable to an owner for periods where the property is in the possession of the administrator.

    (c) Beginning on August 22, 2017, the administrator shall pay interest to the owner of property in the form of money at the greater of: (i) the percentage increase, if any, in the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor (CPI-U); or (ii) the actual rate of return the State Treasurer earned on the Unclaimed Property Trust Fund. Interest begins to accrue when property in the form of money is delivered to the administrator or when the administrator converts property to money pursuant to Article 7 and ends on the earlier of the expiration of 10 years after the property begins to accrue interest or the date on which payment is made to the owner. The administrator may establish by administrative rule more detailed methodologies for calculating the amount of interest to be paid to an owner under this Section.

    (d) When paying interest to an owner pursuant to subsection (c), the administrator shall charge a one-time administrative fee of $5, deductible only from interest.”)
     

  • Illinois RUUPA, 765 ILCS 1026/15-401(d) (“A business association who has no reportable property shall so report to the administrator on forms via the Internet in a format approved by the administrator if the business association has:
     

    (1) annual sales of more than $1,000,000;

    (2) securities that are publicly traded;

    (3) a net worth of more than $10,000,000; or

    (4) more than 100 employees.

    The administrator may increase one or more of the thresholds for filing a negative report by administrative rule.”)
     

  • Illinois RUUPA, 765 ILCS 1026/15-503(h) (“Identification of apparent owners of abandoned property using other State databases.

(1) The administrator may enter into interagency agreements with the Secretary of State and the Illinois State Board of Elections to identify persons appearing to be owners of abandoned property with databases under the control of the Secretary of State and the Illinois State Board of Elections. Such interagency agreements shall include protection of confidential information, data match rules, and other necessary and proper issues.

(2) Except as prohibited by federal law, after January 1, 2022 the administrator may provide the Secretary of State with names and other identifying information of persons appearing to be owners of abandoned property. The Secretary of State may provide the administrator with the last known address as it appears in its respective records of any person reasonably believed to be the apparent owner of abandoned property.

(3) The Illinois State Board of Elections shall, upon request, annually provide the administrator with electronic data or compilations of voter registration information. The administrator may use such electronic data or compilations of voter registration information to identify persons appearing to be owners of abandoned property.

(4) The administrator may deliver, as provided under Section 15-904, property or pay the amount owing to a person matched under this Section without the person filing a claim under Section 15-903 if:

  • (i) the value of the property that is owed the person is $2,000 or less;
  • (ii) the property is not either tangible property or securities;
  • (iii) the last known address for the person according to the records of the Secretary of State or Illinois State Board of Elections is less than 12 months old; and
  • (iv) the administrator has evidence sufficient to establish that the person who appears in the records of the Secretary of State or Illinois State Board of Elections is the owner of the property and the owner currently resides at the last known address from the Secretary of State or the Illinois State Board of Elections.”)