Topic: Unclaimed Property
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If we drill a safe deposit box and sell the contents, can we use the proceeds to pay unpaid rents and late charges, or only the expenses incurred in opening the box and changing the lock?
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As discussed below, the answer depends on the terms of your safe deposit box account agreements. Under the Uniform Disposition of Unclaimed Property Act, a bank may be reimbursed for drilling and other costs associated with opening an unclaimed safe deposit box. However, no other charges may be deducted unless “authorized by law or expressly provided…
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Under Illinois’ new unclaimed U.S. savings bonds law that took effect January 1, 2017, a savings bond is unclaimed and escheats to the state when it is unredeemed for five years after its date of final extended maturity. So if someone comes in to redeem a bond five years or more after its maturity date, can we still redeem the bond, or does the law require us to confiscate it and remit it to the state?
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The new law does not prohibit you from redeeming bonds that are more than five years past their extended maturity date or require you to confiscate such bonds to remit them to the state. First, it is important to note that the new law applies to abandoned bonds held by the State Treasurer, not to…
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We flag accounts as inactive after certain periods of inactivity, depending on the account type (but long before five years have passed and the accounts are reported and remitted to the state as abandoned). Some at the bank believe that the best approach is to contact those customers in an effort to remove the “inactive” flag. Are there any reasons why we might want to retain the inactive flag to protect the accounts, by helping us recognize potentially fraudulent activity? We do not charge dormancy or inactivity fees.
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Ultimately, this is a business decision for the bank. We agree that it may benefit customers to retain an “inactive” flag on accounts that are infrequently used to help recognize potentially fraudulent activity. The Interagency Guidelines on Identity Theft Detection, Prevention, and Mitigation state that the use of an inactive account is a red flag…
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How long should we retain the dormant account notices that we mail to the customer? What about the rest of the dormant account documentation? Do we need to retain that documentation permanently?
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No, you do not need to retain dormant account documentation permanently. The Uniform Disposition of Unclaimed Property Act requires the holder of a dormant account to retain records for five years after the account is presumed abandoned, which generally occurs after five years of inactivity. We believe the five-year record retention requirement also applies to…
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When are we required to send unclaimed property to the Illinois State Treasurer? I thought it was after five years, but the Illinois State Treasure’s website states that the abandonment period for most properties is “three years.”
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Property held by banks generally is presumed to be abandoned after five years of inactivity, but there are some exceptions. While various types of property are subject to longer or shorter periods, we are not aware of a three year abandonment period applicable to any type of property under the Illinois Uniform Disposition of Unclaimed…
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What types of fees can we charge for safe deposit boxes? What notification is required?
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We are not aware of any limitations on fees or charges for safety deposit boxes, but your safety deposit box lease agreement should disclose your fees and charges. Notably, if you need to report and remit a box’s contents to the State Treasurer as unclaimed property, you may not withhold fees unless they are reflected…
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When does the five year abandonment period start to run for a safe deposit box? Does it begin when the customer last accessed the box or when the rent payment became past due?
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The five years begins to run when the lease expires. A safety deposit box will be presumed abandoned after five years have passed from the “date on which the lease or rental period expired.” Your safety deposit box lease will determine whether the lease expires when the rent payment becomes past due or on another…
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Is a Health Savings Account (HSA) treated like other checking/savings accounts for remittance or does it follow the IRA guidelines for remittance?
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A Health Savings Account (HSA) should be treated like a savings or checking account under the Uniform Disposition of Unclaimed Property Act (UPA), subject to the discussion below. An HSA is a custodial account that may be established as a savings or checking account. Unlike an individual retirement account (IRA) — which is specifically addressed…
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We plan to drill a safety deposit box that has been past due and unclaimed for more than five years. However, the last living joint leaseholder recently came forward to claim the contents. Can we give him the contents of the box, or do we have to remit the contents to the State Treasurer?
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You may give the contents of the safety deposit box to the joint leaseholder. The Uniform Disposition of Unclaimed Property Act requires financial institutions to report and remit abandoned property to the State Treasurer. If contents of a safety deposit box are unclaimed for five years after the leased expired due to nonpayment — which…