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Advocacy Update

Posted By Administration, Thursday, July 2, 2020

To help members remain aware of UPPO’s advocacy activities, the Unclaimed Property Focus blog presents the recurring Advocacy Update when legislatures are active or significant advocacy activity has occurred. Following are recent activities and trends from UPPO’s Government Relations and Advocacy Committee (GRAC).

 

Retirement Account Dormancy

With the COVID-19 pandemic disrupting so many areas of our lives in the past few months, it’s little surprise that it has led to complications related to unclaimed property. Passed last year, the SECURE Act changed the required minimum distribution date for individual retirement accounts from 70.5 to 72. The CARES Act, designed to ease the economic impact of the pandemic, waives the required minimum distribution for 2020. Because the required minimum distribution date may begin the unclaimed property dormancy period, holders are affected. GRAC is currently developing questions for holders to use when working with states to respond appropriately to this issue.

 

Certified Mail

Because some states have included language in their RUUPA bills requiring certified mail to be used for due diligence letters, GRAC is developing a position paper for UPPO expressing its objection to a certified mail requirement. However, should language be included in a RUUPA bill, UPPO’s position is to specify certified mail receipt cards be accepted as a form of contact, regardless of who signed the cards.

 

Savings Account Language

GRAC is also drafting recommended language to provide states that introduce RUUPA bills using incorrect language to address the treatment of Demand Deposit accounts versus standard savings accounts, which has become a trend.

 

Unclaimed Savings Bonds

Over the past several years, states have battled with the U.S. Treasury over unredeemed U.S. savings bonds. Kansas State Treasurer Jake LaTurner led the state charge in the courts, arguing that proceeds from matured, unredeemed bonds should be turned over to the states. Last year, a federal appeals court ruled the Treasury is not required to do so. The plaintiffs are asking the U.S. Supreme Court to review the case. GRAC is reviewing the case to evaluate whether it is appropriate for UPPO to draft an amicus brief, taking a position on this issue.

 

Positive Legislation

Ohio HB 270, the Unclaimed Funds Reform Act, is moving quickly, having passed the House and under consideration in the Senate. Among other things, the bill would clarify the treatment of auto-renewing certificates of deposit.

 

Tennessee SB 1634 was signed into law by the governor on June 22, 2020. The bill increases the time before the state treasurer liquidates securities from “eight months to a year” to “32 to 36 months.” 

 

Reporting in California

California normally required unclaimed property reports to be filed via CD and paperwork. The state is now allowing holders to send reports via FTP. However, to take advantage of this process, holders first need to request permission. Contact the California State Controller’s Office for details.

Tags:  Advocacy  dormancy  due diligence  IRAs  unclaimed property 

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Thomas Powers, U.S. Bank says...
Posted Thursday, July 2, 2020
Some clarification to this item: "GRAC is also drafting recommended language to provide states that introduce RUUPA bills using incorrect language to address the treatment of Demand Deposit accounts versus standard savings accounts, which has become a trend." The recommended language addresses the treatment of demand deposit AND savings accounts versus time deposit accounts with regards to the presumption of abandonment provisions of RUUPA.
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