We have conducted a routine review of our NOW accts to ensure they all meet egilibility requirements. We found a few that were egibible when opened but now their businesses are in dissolution or have been disolved (as evidenced by the States Business in good standing). The accounts are still active.

At this point should we convert the accounts to a non-interest bearing checking product?

My gut tells me yes - I have others saying no.

I'm confused. You are saying the business had a NOW account, and is going away, so they can't have one any longer? What gave them ownership rights in the first place?

Quoting from a Q&A John Burnett did to sum this up - NOW accounts can be held by individuals, domestic government units, non-profit organizations and certain others when holding the funds in a fiduciary capacity for individuals eligible to hold NOW accounts in their own right.

Okay it's been a confusing day all day for me as well. Let's see if I can clarify.

Originally the enities were eligible because they were non-profit organizations. While checking on our states website to ensure that they continued to be eligible we noticed that the state indicates the organiztion are being dissolved or are dissolved. The accounts are still active, and in the organization name.

Call the account contacts and get this straighten out. If they no longer exist, then neither should their accounts - interest bearing or not.

It's not uncommon for non-profits to be a little lackadaisical about the formalities of annual filings to maintain their legal status. They simply are sometimes unaware of the way such things operate. So they may not even be aware that the state has them in legal Limbo right now. Your call to them may be a wake up call to get them on the right track.

Thanks for all the replys - we will be making phone calls!

If I can't get documents to ensure they qualify we will take action.