Charging Dormant/Inactive Fees

Answered by:

Question:

Our institution is based in Missouri, but we offer an online savings account. We are wondering about what state laws we use for charging dormant/inactive fees to accounts? Missouri Law is that once an account is inactive/dormant for twelve months we can charge a fee up to $5.00 a month. Then after five years of inactivity, the account is considered abandoned and will need to be sent to the State Unclaimed Property department. If a customer from different states opens accounts online with us, do we abide by Missouri Law or the state law which they reside in?

Answer:

Dan Persfull:
The dormancy/escheatment rules for the state where the account is maintained generally prevails because chances are you have no idea where the customer is located since the account is dormant. But you should consult your attorney.

Answer:

Randy Carey:
Dan is correct and escheat reciprocity among States is a complex issue. For example, here is the Oregon law: https://www.oregonlaws.org/ors/98.346