Escheats of Military Accounts Bill Passes Unanimously
This week, the Michigan Senate passed SB 125 by Sen. Tom Barrett, to amend State unclaimed property law on escheating dormant accounts of active duty military members. The bill creates a single time frame for military members deployed domestically and overseas, simplifying escheat process for financial institutions and eliminating regulatory confusion.
During conversations with multiple credit unions, it was brought to the Michigan Credit Union League’s attention that the Department of Defense’s database does not allow credit unions to see if their members are active duty overseas military members.
Verifying status is important in determining when to escheat funds in a dormant account to the state. If a member is active duty overseas military, the credit union is able to hold the funds in a dormant account for an additional two-year period (five years total). However, because our credit unions are unable to verify if a member is overseas or not, it becomes impossible to determine whether to hold the funds or escheat them to the state.
Sen. Barrett introduced SB 125, which will remedy this situation and provide for a uniform period of dormancy prior to the escheating of funds for all active duty military regardless of whether they are overseas or stationed stateside. SB 125 provides a timeline of five-year for all active duty military members. The legislation was voted unanimously out of the Senate Families, Seniors and Veterans committee and by a vote of 34-0-4 off the Senate floor. The legislation is now headed to the State House.