Topic: Unclaimed Property
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Can our bank issue a service charge to customers on property that we remit to the State of Illinois? If Illinois law requires that our customers must agree to a remittance fee, is it sufficient to send a notice of change in the terms of a customer’s account agreement prior to charging the fee?
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Yes, you may charge a service fee when you remit property to the State (also known as an “escheat fee”), subject to the limitations discussed below. If an account has been deemed to be abandoned, requiring its remittance to the Illinois Treasurer’s office, Illinois law permits banks to withhold “lawful charges” from the account before…
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We want to add a message to our safe deposit box delinquency notices to notify service members of their protections under the Servicemembers Civil Relief Act. The message we are considering is “[Our Bank] will not open your safe deposit box or claim any right to the contents of your safe deposit box without a court order. This protection lasts throughout the term of your military service and for an additional 90 days after your military service ends.” Does Illinois have any specific timing requirement for storage lien enforcement or foreclosure?
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Your proposed notice correctly incorporates the Servicemembers Civil Relief Act, which states that a storage lien may not be foreclosed or enforced against a service member during his or her military service and for 90 days thereafter without a court order. There is no corresponding provision in Illinois, however, because the Illinois Service Member Civil…
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Under Illinois law, are we required to have a notary who is not a bank employee present when drilling a safe deposit box? We currently have a box in one of our Illinois branches for which no owner can be identified.
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We are not aware of a requirement to have a notary present when opening a safety deposit box. The Illinois Safety Deposit Box Opening Act does not impose such requirements. Your primary federal regulator, the OCC, has published helpful guidance on establishing reasonable procedures for drilling safety deposit boxes. It is important to note that…
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Can we remove an inactive status on an account if the customer has other active accounts?
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Yes, you may change the inactive status to active status on an inactive account if the customer has other active accounts with your bank. However, you should check your account agreements to make sure that any changes you make are consistent with your disclosed practices. The Uniform Disposition of Unclaimed Property Act does not consider…
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Do we report a customer’s bank account as unclaimed property to the state of Illinois if the customer has a New Jersey address?
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The Uniform Disposition of Unclaimed Property Act and its corresponding rules do not provide any guidance on how to handle property held by Illinois financial institutions for out-of-state customers. We contacted the Illinois State Treasurer's office for further guidance, and a staff member said that because they have reciprocity agreements with every state except California…
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Do you know of any state or federal law that would prohibit a bank from charging a dormancy fee on a deceased customer’s account after one year of inactivity?
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No, we are not aware of any state or federal law prohibiting you from charging a deceased customer’s account a dormancy fee, provided that the customer agreed to the fee when opening the account. However, we recommend communicating with a representative of the decedent’s estate within a reasonable time to determine their intentions with the…
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A customer purchased a cashier’s check seven years ago. The named payee has not cashed the check, and we do not even know whether the customer has delivered the check to the payee. Can we contact the customer before remitting the check as unclaimed property? And can the customer place a stop payment order on the check and request that the check be reissued?
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Yes, you are required to contact your customer before reporting the cashier’s check as unclaimed property. And no, the customer cannot issue a stop payment order on the cashier’s check if it already has been presented to the payee. However, if the cashier’s check has not been presented to the payee, the customer can surrender…
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We currently have funds sitting in a separate, non-wage garnishment account. Since we received the garnishment notice, back in 2002, we have never received a turnover order, the customer has closed all of its accounts, and as far as we know, the creditor no longer exists. How long should we maintain the garnishment account?
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We believe your institution should have reported the segregated garnishment funds to the Illinois State Treasurer as unclaimed property after five years of inactivity, and since it has not, it should do so now. Two different Illinois laws appear to be in conflict here, but we think the stronger argument is that you should comply…
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A deceased customer’s checking account has been dormant for three years. We have mailed several notices without receiving a response. Can we report the account as unclaimed property and remit it to the state before we are required to? Are there any consequences for early reporting?
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Yes, you may report and remit the account before the Uniform Disposition of Unclaimed Property Act deadline. The Act permits property holders to “report and deliver it prior to the date required for such reporting” if they believe it “will be reportable in the future as unclaimed property.” We are not aware of any consequences…
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When reporting unclaimed property, should a bank holding company follow the reporting deadlines for a banking organization or for a business association?
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We believe that a bank holding company should be considered a “business association” under the Uniform Disposition of Unclaimed Property Act. The Act defines “banking organization” and “financial organization” to include several types of banks, but neither definition encompasses a bank holding company. Therefore, property held by the holding company (and not held by the…