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#1680752 - 03/22/12 12:11 AM California Escheat
bankerdiva2 Offline
100 Club
Joined: May 2011
Posts: 110
I have looked everyone online and cannot find the answer to this question. Several years ago we issued a cashier check to a third party on behalf of a Construction Loan customer. The check is now going to escheat to the State of California. Who is the owner the Construction loan customer (the remitter on our records) or the payee?
Thank you for your help.

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#1681251 - 03/22/12 08:24 PM Re: California Escheat bankerdiva2
KeaneUP Offline
New Poster
Joined: Mar 2012
Posts: 5
Unless the payor is in ‘possession’ of the instrument and presents for payment, the owner would be the payee.
_________________________
Debbie Zumoff
Chief Compliance Officer
Keane Unclaimed Property
www.keaneup.com

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#1681952 - 03/24/12 01:19 AM Re: California Escheat bankerdiva2
bankerdiva2 Offline
100 Club
Joined: May 2011
Posts: 110
Debbie,

Is this specific to California? Is there a place I can confirm the information? Does this apply to all negotiable instruments? What if I had no contact information for the payee than their name. How would I notify them? As a customer may purchase a cashiers check without providing the bank any of the payees information. If our customer paid for the item why is it not considered theirs if has not been negotiated prior by the time it is set to escheat?
Thanks!

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#1682134 - 03/26/12 04:21 PM Re: California Escheat bankerdiva2
KeaneUP Offline
New Poster
Joined: Mar 2012
Posts: 5
My prior response is not specific to California but rather applies as a general unclaimed property rule to all negotiable instruments as well as to any property eligible for unclaimed property reporting. The jurisdictional priority rules for unclaimed property reporting are outlined in the US Supreme Court case of Texas v. New Jersey (1965).

So, in the absence of a payee’s address, the uncashed cashier’s check would be reportable to the bank’s (as the holder of the funds) state of incorporation. And yes, notice to the payee without an address is challenging. As a best practice you might try your Construction Loan customer to inquire if they have any additional contact information for that payee.
_________________________
Debbie Zumoff
Chief Compliance Officer
Keane Unclaimed Property
www.keaneup.com

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