Overall, AB 2209 reflects a significant shift in the treatment of unclaimed property, aiming to balance the interests of financial institutions, the state, and consumers. As with any legislative alteration, monitoring its outcomes will be critical for assessing its effectiveness in achieving its intended protections.
Impact
AB 2209 also adjusts the notification requirements imposed on banking organizations. Instead of providing notice not less than two years and not more than two and a half years following the last activity, the bill mandates that notice must be given not less than three years and not more than three and a half years after the last activity. These changes are intended to allow account holders ample opportunity to respond before their property is deemed unclaimed and handed over to the state. The bill aligns with the intention to safeguard consumers' interests by ensuring they are adequately informed about the status of their accounts.
Summary
Assembly Bill No. 2209, introduced by Assembly Member Choi, seeks to amend the California Code of Civil Procedure regarding unclaimed property. The primary purpose of this bill is to extend the current three-year period of inactivity for demand, savings, or matured time deposits in banking organizations to five years before such property escheats to the state. This aims to provide individuals with a longer timeframe to reacquire their funds before they are transferred to the state's control. Previously, if account owners did not engage with their accounts for three years, the funds could be considered unclaimed and subject to escheatment.
Contention
The discussions surrounding AB 2209 included debates on the implications of extending the escheatment period and altering notification timelines. Proponents argue that the bill helps protect individuals from losing their funds due to inactivity, providing fair notice and time to respond. Conversely, critics express concerns that these changes may inhibit the timely recovery of unclaimed properties by the state, potentially complicating state finances and unclaimed property management.
An Act Concerning State Taxation And Collection, Tax Gap Compliance, Tax Preparers And Facilitators, Changes To The Tax And Related Statutes, A Mental Health Community Investment Account And Municipal Bonds.