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#439003 - 10/11/05 08:05 PM Dormant Fees
SouthernComfort Offline
Platinum Poster
Joined: Aug 2001
Posts: 705
Southern Illinois, USA
Dormant fees are not set by the state are they? We are acquiring a branch in Indiana and I told them that fees were set by the bank and not controlled by the state, but one of the directors of the bank has asked me to prove it. Where would I find information on this subject?

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#439004 - 10/11/05 08:31 PM Re: Dormant Fees
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
IC 28-1-20-1.1
Statements of account; dormant accounts; service and maintenance charges
Sec. 1.1. (a) When a statement of account has been delivered by a bank or savings bank to a depositor, the account, after the period of three (3) years from the date of its delivery, shall be deemed finally adjusted and its correctness conclusively presumed. A statement of account or a passbook is delivered to a depositor, within the meaning of this subsection, when received by the depositor or the depositor's agent in person or when mailed to the depositor at the depositor's last known address. This section does not relieve the depositor from the duty of exercising due diligence in the examination of the statement of account. A depositor must immediately notify the bank or savings bank upon discovery of any error in the statement of account.
(b) Any bank, savings bank, or trust company may impose and collect a monthly service charge and maintenance charge on dormant accounts, whether time or demand, in such reasonable amounts as may be determined by resolution of the board of directors and that are properly disclosed to its depositors.
(c) For the purpose of this section:
(1) every demand deposit account is considered a dormant account after one (1) year from the date of the last transaction recorded on the books of the bank, savings bank, or trust company with respect to the account; and
(2) every time deposit account is considered a dormant account after three (3) years from the date of the last transaction recorded on the books of the bank, savings bank, or trust company with respect to the account.
(d) Any bank, savings bank, or trust company may impose and collect monthly service charges and maintenance charges on active accounts, whether time or demand, that are carried by it on its books, in such amounts as may be agreed upon between it and its depositors.
(e) This section is applicable to national banking associations doing business in this state.
As added by Acts 1980, P.L.40, SEC.9. Amended by P.L.258-1989, SEC.1; P.L.122-1994, SEC.80; P.L.215-1999, SEC.3.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#439005 - 11/18/05 04:01 PM Re: Dormant Fees
Anonymous
Unregistered

We just changed our fees last week, as we found this and it sounds like we cannot charge over 9.00 per year. If anyone reads this differently, please let me know.

Indiana Laws and Regulations
Banking Regulations
TITLE 750 DEPARTMENT OF FINANCIAL INSTITUTIONS
Rule 4. Dormant Charges; Checking and Savings Accounts
750 IAC 2-4-2 Dormant maintenance charges

--------------------------------------------------------------------------------

750 IAC 2-4-2 Dormant maintenance charges
Authority: IC 28-1-2-7

Affected: IC 28-1-11-1; IC 28-1-11-13; IC 28-1-20-1.1

Sec. 2. Charges. (a) Dormant maintenance charges may be made by any banking institution upon any dormant checking or savings account, in any sum exceeding seventy-five cents ($.75) per month; where the amount of the balance in the account is less than the dormant maintenance charge, such charge shall be the amount of the balance.

(b) All dormant maintenance charges may be imposed and charged monthly, quarterly, semi-annually or annually at the option of the bank; provided that the total charge so imposed and collected shall not be at a greater rate than nine dollars ($9.00) per annum.

(Department of Financial Institutions; Banks and Trust Companies Reg No 8, Sec 2; filed Dec 15, 1945, 9:40 am: Rules and Regs. 1947, p. 979; filed Jun 10, 1982, 2:41 pm: 5 IR 1396)

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#439006 - 11/18/05 04:46 PM Re: Dormant Fees
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Click here and you will find:


The bill amends IC 28-1-20-1.1 which deals with service and maintenance charges on dormant
accounts. The statute was changed to eliminate the requirements for the Department to establish
dormant account fees. Under this statute, it will be the responsibility of the financial institution’s
board of directors to establish the dormant account charge and to properly disclose this fee to its
depositors. As a result of these changes, 750 IAC 2-4-1 and 750 IAC 2-4-2 were also repealed.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#439007 - 11/18/05 04:53 PM Re: Dormant Fees
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Sorry, something went wrong with the above link - try this one:

The DFI Update

You'll find the above quote on page 14.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#439008 - 11/22/05 04:08 PM Re: Dormant Fees
Anonymous
Unregistered

Dan,
As for time deposits that have automatic renewal authorizations, at what point do those become "dormant"? Additionally, IC 28-1-20-1.1(c)(1) state ...from the date of last transaction recorded. Is this only consumer executed transactions or does the posting of interest paid on a time deposit or demand deposit account suffice?

Thanks

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#439009 - 11/22/05 05:23 PM Re: Dormant Fees
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
The code only specifies the last transaction posted.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#439010 - 11/22/05 05:39 PM Re: Dormant Fees
complianceman Offline
Platinum Poster
complianceman
Joined: Mar 2005
Posts: 687
New Albany, IN
I have a call into INDFI for further information as to their interpretation of the code. I'll let you know what they say.

Thanks
_________________________
The opinion stated here is what it is, My Opinion.

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#439011 - 11/28/05 04:29 PM Re: Dormant Fees
inquiringmind Offline
100 Club
Joined: Mar 2003
Posts: 155
While on this subject, IC 28-1-20-1.1 defines dormancy for demand and time deposits but not savings accounts. Does the law contemplate that savings accounts should not be considered "dormant?"

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#439012 - 11/30/05 02:56 PM Re: Dormant Fees
complianceman Offline
Platinum Poster
complianceman
Joined: Mar 2005
Posts: 687
New Albany, IN
Inquiring Mind,

I believ that Savings Accounts are included as part of the definition of Time Deposits. So I would follow the Time Deposits guidance.
_________________________
The opinion stated here is what it is, My Opinion.

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#439013 - 03/08/06 04:22 PM Re: Dormant Fees
complianceman Offline
Platinum Poster
complianceman
Joined: Mar 2005
Posts: 687
New Albany, IN
Dan,

If you are out there, can you respond to this addition to my original inquiry:

In reviewing the Indiana Administrative Code, Title 750 (specifically, 750 IAC 6-2-1), it states,

"Definitions. A certificate of investment shall be considered as dormant when the same has not been active for a period of three (3) years or more, as evidenced by the books of the Industrial Loan and Investment Company; and for the purposes of this definition, transactions or entries on the books [of IL & IC] representing service charge debits, interest credits, or memoranda shall not be deemed to change the status of the account from dormant to active; ..."

With that being said, could I correctly assume that the terminology "last transaction posted" as stated in IC 28-1-20-1.1 definitely refers to actual consumer activity and not bank activity?

Thanks
_________________________
The opinion stated here is what it is, My Opinion.

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#439014 - 03/08/06 04:46 PM Re: Dormant Fees
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
IMO yes. If it referred to bank activity then the account would never become dormant.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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