Topic: Unclaimed Property
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Two of our customers have IRA CDs that have matured (without automatic renewals) and are currently earning 0% interest, and despite several phone calls and letters from us, the customers have not renewed the CDs. Without contact from the customers, are we required to do anything with the CDs?
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We are not aware of any laws that would require your institution to take any actions as to the matured certificates of deposit (CDs). If the customers choose not to renew the CDs, and the original agreements did not provide for automatic renewals, then you have no obligation to renew or pay interest on the…
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Does Illinois law determine when we must consider an account to be dormant? We want to extend the period before we start mailing notices to the customer, and we don’t want to wait until the time periods required by the Unclaimed Property Act.
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We are not aware of anything in Illinois law that would restrict your ability to mail notices to a customer regarding a dormant account. The Uniform Disposition of Unclaimed Property Act imposes an affirmative requirement to attempt to communicate with customers before reporting their property as abandoned. 765 ILCS 1025/11(e) [Repealed effective 1/1/18]. However, nothing in…
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Do we have to report abandoned certificates of deposit to the State Treasurer? If so, when should they be reported?
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Yes, certificates of deposit (CDs) must be reported to the State Treasurer once they are deemed abandoned. Subsection 2(c) of the Uniform Disposition of Unclaimed Property Act [Repealed effective 1/1/18] covers “[a]ny sum payable on checks or on written instruments on which a banking or financial organization or business association is directly liable including, by…
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Is there anything in Illinois law that restricts a bank from reversing a dormancy fee?
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We are not aware of any law that would prevent your organization from charging or reversing the charge of a dormancy fee. Generally, Illinois law permits a bank to determine an appropriate dormancy fee in accordance with the bank’s prudent business judgment and safe and sound operating standards. 205 ILCS 5/5e(b). If an account has…
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Are there rules in place regarding the types of accounts that cannot be charged a dormant account fee? For example, what about accounts held by minors or escrow accounts?
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We are not aware of any law that would prevent your organization from charging a dormant account fee on accounts held by minors or on escrow accounts. Generally, Illinois law permits a bank to determine an appropriate dormancy fee in accordance with the bank’s prudent business judgment and safe and sound operating standards. 205 ILCS…
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We acquired a bank in 2010. Some accounts were already in dormant status when we purchased them. Can we rely on their inactivity and report them to the state?
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Under the Uniform Disposition of Unclaimed Property Act [Repealed effective 1/1/18], deposit accounts are presumed abandoned after five years of no communication from the owner or activity on the account (or on any other accounts that appear on the same consolidated statements). 765 ILCS 1025/2(a) [Repealed effective 1/1/18]. If the account owner has not taken any of…
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Do any laws require us to hold signature cards for dormant accounts under dual control in safe deposit boxes, or is this a bank policy decision?
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We are not aware of any laws that would require the bank to hold signature cards for dormant accounts in dual control safety deposit boxes. While the Banking Act mandates the Commissioner of Banks to promulgate record retention rules, no such rules have been published. 205 ILCS 5/48.6. And, the federal agencies’ Interagency Guidelines Establishing…
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On a minor savings account (with minor as primary accountholder and parents as joint accountholders), can we charge a dormant account fee and report the account to the State Treasurer?
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We do not see any problems in charging a dormant account fee and remitting an account to the state, even though the primary owner of the account is a minor. Under the Uniform Disposition of Unclaimed Property Act [Repealed effective 1/1/18], deposit accounts are presumed abandoned after five years of no communication from the owner or…
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Does a certificate of deposit (CD) that automatically renews ever become dormant or abandoned?
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Yes. Under the Uniform Disposition of Unclaimed Property Act [Repealed effective 1/1/18] (and the regulations promulgated under that law), any certificate of deposit accounts would not be presumed abandoned until five years after the maturity date of the first renewal or rollover of the account. For example, if a customer opens a five-year certificate of deposit…
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Can we retain a fee from abandoned cashier’s checks and money orders before remitting them to the State Treasurer?
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We do not believe that a bank may retain fees on abandoned cashier’s checks and money orders, though this is an exception to the general rule that you may retain any fees that a customer has agreed to. Illinois law permits a bank to charge any fee in accordance with the bank’s prudent business judgment…