Unclaimed Property and Corporate Compliance News

Banking Crisis Leading to More State Unclaimed Property

The Great Recession and general economic turmoil in the past four years has led to 425 banks closing (and counting!) their doors since January 2008. The FDIC acts as the receiver of the assets of the failed banks, attempting to return funds to the account owners. But as with other holders, the FDIC is not always able to return funds with their rightful owners, leading to unclaimed property.

Reporting Late Property in Arkansas

Arkansas, a fall reporting state, has not been one of the states that regularly charges interest on late reported property. However, they have been sending notices out to holders remitting late property that they may begin charging interest and penalties beginning with the 2012 reports.

The text of the notices includes:

Maryland Comptroller wants to Eliminate Newspaper Advertisements

Add the Maryland to the list of state agencies and treasurers that would like to do away with the requirement that they run newspaper advertisements to alert owners of unclaimed property. Maryland Comptroller Peter Franchot says that eliminating the listing requirement would save the state over $500,000 annually.

Audit Nightmares: Computer Associates, Inc

In a new regular feature, Barganier will be profiling unclaimed property audits that went awry. These audits provide insight into the auditor's methods and motives, as well as stress the importance of ongoing compliance.

What happens when a Delaware Voluntary Disclosure Agreement (“VDA”) goes bad? In the case of Computer Associates, Inc. (“CA”), the VDA is terminated and Delaware opens a full blown audit. CA had an initial VDA estimate of $685,000 in 2005. When CA and Delaware finally settled under litigation in February 2010, CA paid $17,650,000 to the state.

How Do States Reunite Property with Owners?

Yesterday, the Wall Street Journal had an article titled "States, Companies Don't Excel At Giving Back Unclaimed Money" that described the dismal record of both states and holders of returning unclaimed property to the owners. But what efforts do states take to return the property once it is in their coffers?

Top 10 Unclaimed Property Tips for Insurance Companies

States are increasing enforcement of unclaimed property statutes. Unlike many state compliance areas, there is little guidance from the U.S. Supreme Court or Congress, leaving a wild west feeling to unclaimed property. To help you get a handle on unclaimed property, Barganier and Associates has prepared this Top 10 tips for insurance companies for handling unclaimed property liabilities.

New Unclaimed Property Law for the Northern Mariana Islands

The Commonwealth of the Northern Mariana Islands (CNMI), of which Saipan is the largest island and has the largest population, has a new unclaimed property law which provides for the escheat of dormant bank accounts and other financial institution accounts and funds. The new law only applies to financial institutions and not general corporations.

The new law does not follow the Uniform Unclaimed Property Act. If your bank does business in Saipan or elsewhere in the CNMI, it is important to carefully review the statute to maintain full compliance.

New Instructions for Reporting Securities in New York

New York has changed the broker that handles securities for the Office of Unclaimed Funds (OUF). Citibank is now the broker of record for the OUF. If your company is reporting securities, please make sure that the account numbers are updated before sending your wire transfer.

All transferred securities must be registered in the name of the Comptroller. Securities that are transferred in any other name will be returned, thus leading to interest assessments.

Arizona Bill Would Do Away with Legal Notices in Newspapers

In today's modern world of technology and communication, publishing legal notices in newspapers seems outdated and unnecessary. Other than lawyers, few, if any, people read legal notices in the back section of usually a small "general" circulation newspaper. An Arizona bill would do away with the requirement to publish the legal notices in a newspaper.

Progress Continues in Wisconsin on Unclaimed Property Bills

Currently, there are three bills (and their companions) before the Wisconsin state legislature to modify the Wisconsin Unclaimed Property statutes. These bills were introduced at the request of and with the full support of the State Treasurer Kurt Schuller. Schuller is expecting to see movement on these bills in the next few weeks.

In particular, companies reporting unclaimed property should be interested in SB 296 (AB 419) which would change the mandated interest of 18% to 12% at the option of the Treasurer for late reporting.