2014 Vol. 98 No. 9

18 Hoosier Banker September 2014 COMPLIANCE CONNECTION Question: Can an ACH transaction be used to prevent an account from being presumed abandoned and being subject to custody by the state of Indiana as unclaimed property? Answer: Under the Indiana Unclaimed Property Act1 (the “Act”), a financial institution is required to annually file a report with the Indiana attorney general describing any property it holds that is presumed abandoned and is subject to custody by the state as unclaimed property.2 The reporting financial institution is also required to deposit such abandoned property with the attorney general at the time the report is filed.3 An “account”4 is presumed abandoned and is subject to custody by the state if the last known address of the apparent owner5 is in Indiana,6 and if it has been three years since the date of the last indication by the owner of an interest in the account.7 The three-year period begins on the date of the last owner-generated activity.8 “Owner-generated activity” means any activity generated by the owner of the unclaimed property or by the owner’s authorized agent.9 As such, an ACH transaction would not normally prevent an account from being presumed abandoned and escheating to the state. Owner-generated activities which would prevent an account from being presumed abandoned and escheating to the state include the following: • A deposit or withdrawal from the account, • The mailing of any correspondence from the financial institution to the owner of the account “if the correspondence is not returned to the financial institution for nondelivery,” or • Any activity by the owner that concerns: - “Another demand, savings or matured time deposit account or other account that the owner has with a financial institution, including any activity by the owner that results in an increase or decrease in the amount of any other account; or - Any other relationship with the financial institution, including the payment of any amounts due on a loan; if the mailing address for the owner contained in the financial institution’s books and records is the same for both an inactive account and for a related account.”10 t aBout ComplianCe ConneCtion In order to address compliance inquiries from members, IBA provides Compliance Connection, an assistance program offering advice on Indiana-specific compliance questions. If the matter requires legal advice, IBA Compliance Connection will refer the bank to a law firm. The material in this issue was prepared by Larry C. Tomlin, partner with Krieg DeVault LLP, Indianapolis, and IBA compliance consultant. Submit Compliance Connection questions to IBA’s Amber R. Van Til at avantil@indianabankers.org. This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation. 1 See Ind. Code § 32-34-1-1 et seq. 2 See Ind. Code § 32-34-1-26(a) (noting also that the Act does not include a de minimis exception for small amounts but provides that “[i]tems of value of less than fifty dollars ($50) may be reported by the holder in the aggregate”). 3 See Ind. Code § 32-34-1-27(a). 4 “Account” includes a demand, savings and a matured time deposit (including a deposit that is automatically renewable). See Ind. Code § 32-341-20(c)(12). 5 An “apparent owner” is “a person whose name appears on the records of a holder as the person entitled to property held, issued, or owing by the holder.” See Ind. Code § 32-34-1-4. 6 See Ind. Code § 32-34-1-21 (noting scenarios in which property is subject to the custody of the state of Indiana as unclaimed property if it is presumed abandoned). 7 See Ind. Code § 32-34-1-20(c)(12); see also 10 IAC 1.5-3-3 (“The allowable holding period shall be determined by the type of liability or by the type of property payable, not the method of payment.”). 8 See 10 IAC 1.5-3-2. 9 See 10 IAC 1.5-1-8. 10 See Ind. Code § 32-34-1-20(a)(2)(E). Carrier selection is one of the most critical decisions in a BOLI purchase. Not all BOLI providers offer carriers with the top AAA rating. Executive Benefits Network offers its clients the most highly rated BOLI carriers in the industry; delivering the long-term benefits and financial strength our clients expect. Now that is Knowledge You Can Bank On.™ We Peel Back the Layers So Our Clients Can Fully Uncover BOLI. ©2014 EBN BOLI & Deferred Compensation Experts 800.780.4EBN ebn-design.com

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