Uniform Unclaimed Property Act

September 25, 1997, Richmond

The special joint subcommittee studying the 1995 Uniform Unclaimed Property Act met for the second time to discuss proposed amendments to the act. The deputy treasurer described the Department of Treasury's commitment to the proper handling of unclaimed property and support of the Uniform Act. The deputy treasurer read a letter from the Treasurer of Virginia stating that the Uniform Act (with amendments suggested by the department) continues current provisions of Virginia law, provides greater consumer protection, and allows greater efficiency in administering unclaimed property in the Commonwealth.

Suggested Amendments

The director of the Division of Unclaimed Property and a representative from the Attorney General's office presented the suggested amendments to the act. The proposed amendments served to retain provisions of current Virginia unclaimed property law or clarify the Uniform Act. However, members of the subcommittee and interested parties expressed some concerns about several sections of the Uniform Act as amended, including provisions dealing with mineral rights, dormancy charges, interest and penalties for failure to report unclaimed property, and requests for reports and examinations of records.

Objections to Amendments

Mineral rights and mineral proceeds are defined in the Model Act, and mineral proceeds are included as property subject to the Model Act. Currently, mineral rights are not addressed in Virginia's unclaimed property laws. Members of the subcommittee requested the division to provide further information on the overall impact of including mineral proceeds in the act.

The Virginia Banker's Association and the Virginia Credit Union League specifically objected to the proposed amendments concerning dormancy charges. These are charges a holder can impose while maintaining unclaimed property. Representatives of these two organizations explained their position that the present Virginia law allowing such dormancy charges to be set according to the terms of a written contract is a better approach. The subcommittee also requested that further explanation be provided at the next meeting regarding the interest and penalties to be paid for failure to file an unclaimed property report with the division.

Another objection concerned the request for reports and examination of records procedures. Particularly, the assessment of charges of $200 a day when reportable property is discovered by an examiner was characterized as an unnecessary incentive for examiners to find unreported property. The Virginia Bankers Association reminded the special subcommittee that despite the commitment by financial institutions to adhere to unclaimed property laws, the large number of accounts held by these institutions increases the potential for inadvertent oversights. These oversights could be uncovered by examiners in order to receive the contingency fee.

Next Meeting

The chairman asked all interested parties to meet and work towards developing consensus in these areas prior to the next scheduled meeting. The subcommittee decided to meet on December 3 to finalize recommendations, which will be reported to the House Committee on Corporations, Insurance and Banking prior to the 1998 Session of the General Assembly.