Unclaimed Property and Corporate Compliance News

Ontario Takes Next Steps Toward Collecting Unclaimed Property

In March, Ontario, Canada, announced in its 2012 annual budget, its intention to begin an unclaimed property program. Now, Ontario has requested consultation or input from the public on the creation of the program. So far, the guiding principles are much like U.S.-based programs, with the government holding properties instead of companies until such time as the owners may claim them; the property may be used by the government in the interim; and holders would be required to notify owners before reporting.

Illinois Proposed Changes to Regulations on Holder Reporting

Chicago, Illinois LandmarksUnclaimed property reporting is driven by state statutes, while additional guidance may be given in the form of state regulations. Illinois is proposing a change to their regulations governing unclaimed and abandoned property reporting.

Hawaii Amends Laws on Reporting Unclaimed Property

Waves near KauaiHawaii is now a report and remit state, with both the report and payment due on or before November 1, 2012.

CFPB Looking Into State Laws on Gift Cards

The Consumer Financial Protection Bureau is now looking into whether the shorter unclaimed property dormancy periods for gift cards are permissible, in light of federal law. At issue is several states attempt to collect the unused balances of gift cards after two years as unclaimed property. Federal law, specifically the Electronic Funds Transfer Act (EFTA), requires that gift cards cannot expire for at least five years.

Michigan Limits Audit, Record Retention Periods for Holders

On August 1, 2012, Michigan House Bill 5577 was signed by Governor Snyder. H.B. 5577 has several important changes for holders reporting unclaimed property in Michigan:

Delaware Passes SB 258 for VDAs with Secretary of State

Delaware has enacted SB 258 which now gives corporate holders an alternative to reporting past due property. For a limited time, holders may choose to go forward with a voluntary disclosure agreement through either the Unclaimed Property Division or the Secretary of State. The Secretary of State's program offers a shortened look-back period, as well as the promise not to audit completed VDAs.

North Carolina Reduces Record Retention Period for Unclaimed Property

In further action by the State of North Carolina to maintain a business friendly environment, North Carolina has reduced the record retention period for unclaimed property holders from ten years to five years for those holders that have filed unclaimed property reports.

Senate Bill 810, in Section 9 reads:

G.S. 116B‑73(a) reads as rewritten:

North Carolina Limits Contingent Fee Audits

An often heard complaint about the holder audit system has been the states' use of contingent fee auditors, who have incentives to ignore valid holder positions and arguments in order to increase the assessments against the holders. North Carolina has moved to eliminate that concern for holder audits in most circumstances.

North Carolina HB 462 limits the use of contingent fee auditors to life insurance companies and holders of unredeemed bond funds. General corporations will not be subject to contingent fee auditors in North Carolina anymore. The pertinent language is:

Iowa Offers Amnesty Program for Unclaimed Property

Iowa is offering a limited time amnesty program that will allow holders to report late property without interest or penalties. Holders will need to complete a "Petition for Amnesty Assessment of Late Reporting Interest & Penalties" before reporting on November 1, 2012. This amnesty program does not include any extension of time to report property.

In 2011, Iowa said that they collected $20 million from 4,600 organizations. Iowa is offering this program to encourage holders to voluntarily comply with the state's unclaimed property laws.

Ohio Reaches Settlement on UP Interest Claims

Pending final approval by the court, Ohio appears to have reached a settlement in a class action lawsuit over interest payable to owners of unclaimed property. The settlement would apply to owners who have made claims since August 3, 2000. Only owners with interest claims over $5 would be entitled to a payout under this settlement.

The Ohio Department of Commerce expects the settlement to reach approximately $15 million. Attorneys fees for the plaintiff attorneys would be taken out of the $15 million settlement.