IBA Compliance Connection

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We were not aware of a recent change in the presumed abandonment period for unclaimed money orders. The presumed abandonment period was recently reduced from seven to five years, effective August 5, 2021. For money orders valued at $50 or more, this statutory change left us a little over three weeks to send out our due diligence notices, which we must send out within sixty days of filing our unclaimed property report (due on November 1). We have two years’ worth of money orders that we did not contact the owners about that should be sent this year. What is the best way to handle these?

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We contacted the Illinois Treasurer’s office about this question (without using your bank’s name), and we were told that the Treasurer will not penalize property holders that wait until next year (2022) to report unclaimed money orders.

Technically, the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) required you to contact the apparent owners of any unclaimed money orders and report and deliver them to the Treasurer this year. But because the two-year reduction in the presumed abandonment period for money orders was signed into law on August 6, and given the timing issues noted in your question, the Treasurer’s office said that they would not charge interest or penalties to holders that report unclaimed money orders this year or next year. Their recommendation is to communicate the delay in reporting the money orders to Treasurer staff proactively — either by emailing the unclaimed property division at [email protected] or noting the issue in the comments field when filling out your unclaimed property report.

Note that this answer is based on informal guidance, as the Treasurer’s office has not issued any formal or written guidance on this issue. Additionally, this accommodation is for this year (2021) only and is limited to money orders only.

For resources related to our guidance, please see:

  • 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
  • Illinois RUUPA, 765 ILCS 1026/15-501(a) (“Subject to subsections (b) and (c), the holder of property presumed abandoned shall send to the apparent owner notice by first-class United States mail that complies with Section 15-502 in a format acceptable to the administrator not more than one year nor less than 60 days before filing the report under Section 15-401 if:

(1) the holder has in its records an address for the apparent owner which the holder’s records do not disclose to be invalid and is sufficient to direct the delivery of first-class United States mail to the apparent owner; and

(2) the value of the property is $50 or more.”)

(1) may waive, in whole or in part, interest under subsection (a) of Section 15-1204 and penalties under subsection (b) of Section 15-1204 or Section 15-1; and

(2) shall waive a penalty under subsection (b) of Section 15-1204 if the administrator determines that the holder acted in good faith and without negligence.”)