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#774383 - 07/13/07 03:48 PM Escheatment of Automatically Renewable CDs
Bibliofiend Offline
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Joined: Feb 2006
Posts: 128
DuPage County, IL
I've always been under the impression that you must escheat abandoned automatically renewable CDs. Dormancy starts five years after the second maturity date. (So if a one year CD is opened on 7/13/07 and matures on 7/13/08, the second maturity date is 7/13/09 and the CD becomes dormant on 7/13/14.) That is, assuming there are no other accounts.

Is there something in the IL statute (or some kind of opinion)that specifically mentions this? I'm trying to document this requirement for our operations folks.
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#775443 - 07/15/07 01:38 PM Re: Escheatment of Automatically Renewable CDs Bibliofiend
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
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#775796 - 07/16/07 04:52 PM Re: Escheatment of Automatically Renewable CDs rlcarey
Bibliofiend Offline
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Joined: Feb 2006
Posts: 128
DuPage County, IL
Thanks. I have looked at this section and have noted the pertinent part.

(e) Notwithstanding any other provision of this Section, no deposit except passbook, checking, NOW accounts, super NOW accounts, money market accounts, or such similar accounts as established by Rule of the Director, held by a banking or financial organization shall be presumed abandoned if with respect to such a deposit which specifies a definite maturity date, such organization was authorized in writing to extend
or rollover the account for an additional like period and such organization does so extend. Such deposits are not presumed abandoned less than 5 years from that final maturity date.
Property of any kind held in an individual retirement account (IRA) is not presumed abandoned earlier than 5 years after the owner attains the age at which distributions from the account become mandatory under law.

The nub of the "discussion" I'm having with my Operations Department involves the definition of "maturity date". She seems to think that there is no true maturity date, since the CD is automatically renewable. I, of course, disagree and consider the second maturity date (after the first renewal) to be the Final Maturity Date. So I'm looking for it in plain English.
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#791779 - 08/09/07 02:29 PM Re: Escheatment of Automatically Renewable CDs Bibliofiend
tpowers4 Offline
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Joined: Sep 2006
Posts: 157
St. Louis
I run into this every year. The important distinction is the difference between dormancy (Bank defined) and abandonment (defined above). The account is presumed abandoned 5 years after the second maturity date. That is when it must go through the escheatment process.

Also, the act was updated in the past couple of years, so these are the things that should be looked at before deciding the account is abandoned:
"Engaged in the following activity regarding other funds or loan accounts with the banking organization:

(1) Increased or decreased the amount of the funds, or deposit, or presented an appropriate record for the crediting of interest or dividends; or

(2) Corresponded in writing with the financial organization concerning the funds or deposit;

(3) Otherwise indicated an interest in the funds or deposit as evidenced by a memorandum on file with the financial organization; or

(i) undertook one or more the above actions described in subsection (a) of this Section regarding any account that appears on a consolidated statement with the inactive account;

(ii) increased or decreased the amount of funds in any other account the owner has with the banking organization; or

(iii) engaged in any other relationship with the banking organization, including payment of any amounts due on a loan.

The foregoing apply so long as the mailing address for the owner in the banking organization's books and records is the same for both the inactive account and for the active account."

765 ILCS 1025/2(a).
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