I posted this question in the "operations compliance" forum ... but Randy Carey pointed out that the answer is probably state-specific ... so I will try this forum ...

I read previous posts on dormant cashiers checks ... but I have a few additional questions ...

1. It appears that some banks try to contact the customer or the payee before the check is escheated. Is it appropriate to contact the payee? What if the customer is still holding the check (and the payee does not have knowledge about the check made payable to him/her)?

2. Would your answer to #1 above be different if the payee is the IRS (or a legal business entity)?

3. Would your answer to #1 above be different if the bank uses a third-party vendor to process cashiers checks (and the bank does not carry the checks on its G/L because they are not drawn on the bank)? In this case ... is the third-party vendor responsible and liable for handling the abandoned property?

Thanks for your guidance and insight ...

I contacted the Texas state comptroller's office last year, and they comfirmed that the payee of the check is considered the owner. They suggested listing the remitter also when escheating. We try to contact payees first, then remitters to find out the status of the check. We used to use a third party vendor, and we were responsible for escheating dormant checks. However, they escheated money orders. So you would have to check with them about #3.

Newbie Mgr -- you were correct. I have since received a response from the State Comptroller's Office ... and here it is ... (with a twist) ...

The Payee is the owner on cashiers checks. Unclaimed property is based on last known contact with owner (e.g., Payee), so having lost contact with the Purchaser would not change the dormancy requirements.

If the bank establishes contact with the Payee, then it would not be reportable. Generally, it is reportable only when contact has been lost with the Payee for the required dormancy period.

However, we do honor a claim from a Purchaser under one of two conditions:

1. the Purchaser is still in possession of the check
2. the Purchaser obtains a release from the Payee, stating the funds are not owed to the Payee (e.g. paid with another check, the sale fell through, etc.)

If you determine in the course of your research that the Purchaser is simply holding the check, it is still reportable to the Comptroller in the name of the Payee, without question, after the three year abandonment period has run.

Thanks for sharing this info--I will print it for future reference!