What "Escheat or Dormant Account fees" , does your bank have at this time or planning to implement this year?

Please respond with the fee types and an explanation how your bank charges the fees. Thanks.

We have a club savings account that states "A service charge of $10 will be imposed if your average balance is below $10 and your account has no activity for 6 months." This helps clear up those accounts that people seem to open and then forget about them.

We have a Dormancy Fee - after 2 yrs. of no activity of $5.00 per month. If the balance is less than $10.00, then the fee is the balance of the account. There is also an escheatment fee of $75.00

Thanks,to all those who replied. I found that the "Escheat Processing Fee" is not considered under the "dormant fee" category in PA. Looks like we may institute this type of fee in near future.

Debra, Could you go into a little more detail on how the $75.00 escheatment fee works? This might be something my bank would want to do.

The $75 is deducted prior to sending the remaining monies to the state. It is intended to cover the extensive research that is done prior to this. Things like the branch staff trying to contact the individuals, reviewing past transactions on the account, etc. etc. in trying to track down the account owner. It helps that some of the staff that do the tracing of these individuals know the area, the people, etc. and have a good success rate in their tracking efforts. The $75 is probably too little for the amount of work that goes into this, but at least we can feel comfortable that an escheated account is truly that. Hope this helps.

Debra, Thanks for the information. I appreciate your help and will pass this information on to management.

Debra, Do you disclose this escheat fee on your signature card or is it listed in your disclosure? Thanks, Michelle

Yes, we list the fee in the disclosure booklet; we have a section for various kinds of fees.

Hi!

I am jumping into your discussion on the "escheat processing fee" as disclosure would need to be necessary under REG DD especially to your existing customer base as it is a negative to them.

I'm being told that our signature card must disclose this fee when the customer signs it! We can't notify them that we are starting to charge an escheat fee. That means we can't even start charging the escheat fee until 5 years after we change the signature card.

Michelle,

Our bank's attorney does not classify this fee with the dormant fee as it is a service fee. I agree your signature card and agreement must disclose a "dormant" fee and that is another fee issue.

Yes. Lela is correct, if there is a negative impact for the customer (i.e. the fee is increasing, or it is a new fee, or some other negative impact on the customer) under Reg DD (Section 230.5 - Subsequent Disclosure Requirements), you need to give appropriate notice of the change - 30 calendar days before the effective date of the change. Also, you may want to make sure that you system can handle the fee; i.e. that it is assessed and charged when you want it charged, that it is described correctly on your system records, that kind of thing.

I'm thinking we would charge this fee manually. Charge the fee and then send the rest to the state.

I probably have no business chiming in, but is this fee allowed in Penn? Many states prohibit you from assessing an inactivity fee without jumping through a lot of hoops to notifiy the customer that you are going to do it. The state gets a little upset when you take money just before it gets to them. I worked for one bank that had to pay a state a 6 figure fine because they were not following the rules. As long as you have researched this, I'm sure you will be fine, but it makes me nervous everytime I hear somebody talking about this.

Yes, we are allowed to charge a "dormant fee" in PA. It is not well liked by the state's Unclaimed Property Office. The "only" prerequisite is the signature card and/or account aggreement must have stated this fee It is still a good thing to get approval from your bank's legal department on implementing the dormant fee.

My bank is not allowed the charge a dormant fee because we are state chartered. That's why we were so excited about the escheat fee. I worry about the response from PA Treasury. I don't think they will be to happy about our new fee.

I called the State Unclaimed Property Office when we were in the planning process for this fee. I received their blessing on the "escheat processing fee" but the "dormant fee" was not a "good thing to implement at all.

Great! Did they send it to you in writing? And did they say you couldn't charge more than $xx amount, like $75.00?

My thought is a customer cannot recover anything under $50 back from treasury because we don't submit names with the lower amounts. If the customer complains, we could refund to them.

No, not in writing but I posted the name of the person I spoke with on the subject in my files. I surveyed the other banks in our area who were charging this fee and the amount being charged by them. This helped with the presentation for the fee approval. This also helps with other escheatable items as Money Orders, etc. as I cover the entire bank for the escheating function. This is how I derived at the $75.00 figure. Remember this is a service fee and the bank may charge whatever amount it wants as long as the bank discloses it properly.

A service fee as opposed to what other type of fee? I have been back and forth with the state. They are telling me that if the fee was not in your agreement/fee schedule when the account was opened, you can not assess it against those accounts.

PABanker,

We scrub our uncashed official checks yearly. We send the customer who purchased the check a letter informing them the check is still outstanding. If we don't get a response, we will escheat the check amount.

We've never charged a fee for this although we do charge a fee for the savings accounts we escheat.

Do you deduct your service fee from Official checks and Money Orders before escheating? How do you disclose this fee?

Thanks,

Michelle III

Yes, we do deduct the fee before escheating the funds to the state. We disclose this fee in our schedule of fees and in the letters sent to the customers before the funds are escheated.