Two questions: Does the State of TN deem a Certificate of Deposit dormant after 5 years if it is automatically renewed? Would the payment of interest to the CD be considered "activity" for dormancy purposes?

Without looking up the TN statute on escheat, I believe dormancy is bank defined. We would make sure the customer is aware of the CD and if so, consider the account active but would also be very careful about escheating the account if unable to contact the customer.

In TN, and most other states, the payment of interest is not considered customer initiated activity. The posting of interest to the CD is bank initiated and part of the terms of the CD. TN considers the following to be activity:
"(1) Any demand, savings, or matured time deposit made with a banking organization, together with any interest or dividend thereon, excluding any charges that may lawfully be withheld, unless the owner has, within five (5) years:

(A) Increased or decreased the amount of the deposit, or presented the passbook or other similar evidence of the deposit for the crediting of interest;

(B) Corresponded in writing with the banking organization concerning the deposit; or

(C) Otherwise indicated an interest in the deposit as evidenced by a memorandum on file with the banking organization, providing such memorandum is one which is routinely kept according to customary banking practices;"

They address automatic renewals in their administrative rules: "1700-02-01-.11 ABANDONMENT OF CERTIFICATES OF DEPOSIT. Certificates of deposit which are automatically renewed at the end of a term and for which no contact has been made shall be deemed to be abandoned at the end of the term in which the statutory abandonment period has run." This means that the dormancy trigger is the first maturity date unless the customer takes one of the actions indicated above.

Trying to revive an old thread here, but where does maintaining constant contact with a customer play in all this? If we mail out notification of CD renewal and it never comes back, the bank demonstrates we still constant contact.

After reading the thread again, I just realized this isn't an escheat thread but it goes along with my problem.

Sorry for any confusion.