SLS 20RS-452 ENGROSSED 2020 Regular Session SENATE BILL NO. 268 BY SENATOR JOHNS BANKS/BANKING. Provides relative to abandonment of safety deposit boxes. (8/1/20) 1 AN ACT 2 To amend and reenact R.S. 6:327(B) and (C) and to enact R.S. 6:320, 327.1, 771, and 1142, 3 relative to banks; to provide for the abandonment of safety deposit boxes; to provide 4 for authorized contacts in a safety deposit box agreement; to allow for the disposal 5 of unsalable contents; to provide procedures for disposing of or selling of abandoned 6 contents; to provide relative to the State Unclaimed Property Program; to provide 7 relative to savings and loan associations and savings banks; and to provide for 8 related matters. 9 Be it enacted by the Legislature of Louisiana: 10 Section 1. R.S. 6:327(B) and (C) are hereby amended and reenacted and R.S. 6:320, 11 327.1, 771, and 1142 are hereby enacted to read as follows: 12 §320. Safety deposit box; authorized contacts 13 When a safety deposit box is leased, the bank shall allow the lessee to 14 designate up to two persons as authorized contacts who the lessee authorizes the 15 bank to communicate with, send notice to, and disclose any information 16 regarding the safety deposit box and its contents in the event the safety deposit 17 box becomes abandoned as provided in R.S. 6:327. If the lessee decides to Page 1 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. SB NO. 268 SLS 20RS-452 ENGROSSED 1 designate an authorized contact, the lessee shall provide the full name, home 2 address, telephone number, and if known, the email address for each authorized 3 contact. 4 * * * 5 §327. Abandonment of safety deposit box 6 * * * 7 "B. If the safety deposit box rental is delinquent for six months, the bank after 8 sixty days' notice by mail addressed to the lessee at his address as shown on the 9 safety deposit box contract may, if the rent is not paid within the time specified in 10 said the notice, open the box in the presence of two employees of the bank and a 11 notary public who shall make an inventory of the contents of the box and place such 12 contents in a sealed envelope or other container in the name of the lessee. The bank 13 shall then send notice to the administrator of the Uniform Unclaimed Property Act 14 of 1997 for publication as provided by R.S. 9:161 inclusion in their database and 15 listing on their website that the safety deposit box has been abandoned and that the 16 bank is holding the listed contents thereof. Such The notice shall include the lessee's 17 name and last known address. If the lessee has designated an authorized contact 18 in the safety deposit box contract as provided in R.S. 6:320, the bank shall also 19 send notice to the authorized contact that the safety deposit box has been 20 abandoned and that the bank is holding the contents thereof. The notice may be 21 sent electronically or by mail addressed to the authorized contact at his address 22 as shown on the safety deposit box contract. 23 C. After a bank has entered an abandoned safety deposit box and removed the 24 contents thereof, it shall then hold such contents in the name of the lessee subject to 25 a lien and privilege for the unpaid rent, the costs of opening the box and making the 26 inventory of and storing its contents, and any other costs, expenses or other amounts 27 as provided in the lease or by law. If such amounts are not paid in full within one 28 year from the date the safety deposit box became abandoned, the bank may sell all 29 or any part of the contents by public, private, or judicial sale in accordance with Page 2 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. SB NO. 268 SLS 20RS-452 ENGROSSED 1 Louisiana law and the terms of the safety deposit box contract., and the bank may 2 also dispose of any unsalable contents in accordance with R.S. 6:327.1. After 3 satisfaction of the bank's lien, any remaining proceeds shall be subject to the 4 Uniform Unclaimed Property Act of 1997, R.S. 9:151, et seq. The bank may 5 treat the remaining proceeds as presumed abandoned and turn them over to the 6 administrator of the State Unclaimed Property Program without having to wait 7 for the passage of time delays set forth in R.S. 9:155. 8 * * * 9 §327.1. Disposition of abandoned safety deposit box contents 10 A. If a bank has entered an abandoned safety deposit box in accordance 11 with the requirements of R.S. 6:327, and the bank decides to proceed with 12 disposing or selling the abandoned contents, then the provisions contained in 13 this Section shall apply. 14 B.(1) Prior to a public or private sale of contents from an abandoned 15 box, the following types of property may be classified as unsalable by an 16 independent appraiser, an auctioneer, a pawn broker, or the bank, and disposed 17 of in the following manner: 18 (a) Documents, writings, or photographs having little or no commercial 19 value may be destroyed by the bank, except for those contents subject to the 20 provisions of R.S. 9:155(B). 21 (b) Coins or currency with a face value of twenty dollars or less each that 22 are valued at no more than twice the face value, shall be treated as proceeds of 23 a sale and used to satisfy the bank's lien and any excess proceeds remitted to the 24 Louisiana Unclaimed Property Program by paper check or electronic funds 25 transfer. 26 (c) Coins or currency with a face value of greater than twenty dollars 27 each that are valued at one hundred twenty-five percent or less of face value, 28 shall be treated as proceeds of sale and used to satisfy the bank's lien and any 29 excess proceeds remitted to the Louisiana Unclaimed Property Program by Page 3 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. SB NO. 268 SLS 20RS-452 ENGROSSED 1 paper check or electronic funds transfer. 2 (d) Any other tangible item having an estimated sale value of twenty-five 3 dollars or less may be destroyed by the bank or donated by the bank to a 4 charitable organization qualified under Section 501(c)(3) of Internal Revenue 5 Code, 26 U.S.C. 501, provided that the aggregate value of the items from a 6 specific abandoned safety deposit box does not exceed two hundred fifty dollars. 7 (2) A current version of any recognized numismatist publication may be 8 used for purposes of valuation of coins and currency. 9 C.(1) Prior to a public or private sale of contents from an abandoned 10 safety deposit box that has not been classified as unsalable as provided in 11 Subsection B of this Section, the bank shall obtain an independent valuation of 12 the contents by an independent appraiser, auctioneer, pawn broker, coin or 13 collectibles dealer, a jeweler, or by any other person who is regularly engaged 14 in the business of appraising, buying, or selling like merchandise, or any other 15 combination thereof. 16 (a) Contents from a safety deposit box with an independent valuation of 17 more than one thousand dollars shall be sold for at least seventy-five percent of 18 the independent valuation price at public or private sale. 19 (b) Contents from a safety deposit box with an independent valuation of 20 one thousand dollars or less may be sold without a value restriction at public or 21 private sale. 22 (2) Firearms shall be sold through a federal firearm licensed dealer, or 23 if sold at public auction, through an auctioneer who possesses a federal firearm 24 license. Alternatively, firearms may be turned over to law enforcement. 25 D. Any public or private sale of contents of an abandoned safety deposit 26 box must be a commercially reasonable sale held at a time and place in the 27 judgment of the bank that will bring the most favorable prices for the property 28 involved. For purposes of this Section, "commercially reasonable", includes but 29 is not limited to a sale that would be commercially reasonable under R.S. Page 4 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. SB NO. 268 SLS 20RS-452 ENGROSSED 1 10:9-610, or a sale, or sale methodology, that is approved by the commissioner 2 of financial institutions. A bank may sell the contents of an abandoned safety 3 deposit box in a sale conducted exclusively for the bank, or in a sale conducted 4 jointly for the bank and any number of other financial institutions or other 5 entities. A bank may use an online auction service as a commercially reasonable 6 public sale. 7 E. A bank and its directors, officers, employees, agents, and other 8 representatives who act in accordance with the authority granted in R.S. 6:327 9 and 327.1 relative to the disposition of abandoned safety deposit box contents 10 shall be immune from all civil and administrative liability. 11 * * * 12 §771. Disposition of abandoned safety deposit box contents 13 The provisions of R.S. 6:320 and 327.1 relative to the disposition of 14 abandoned safety deposit box contents shall be applicable to savings and loan 15 associations chartered under the Louisiana Savings and Loan Association Law 16 in the same manner as they are applicable to state banks. 17 * * * 18 §1142. Safety deposit boxes and safekeeping 19 The provisions of R.S. 6:320 through 328 relative to safety deposit boxes 20 and safekeeping shall be applicable to savings banks chartered under the 21 provisions of the Louisiana Savings Bank Act of 1990 in the same manner as 22 they are applicable to state banks. The original instrument was prepared by Morgan Robertson. The following digest, which does not constitute a part of the legislative instrument, was prepared by Beth O'Quin. DIGEST SB 268 Engrossed 2020 Regular Session Johns Present law provides procedures relative to the abandonment of safety deposit boxes and allows banks to sell the contents of an abandoned safety deposit box by public, private, or judicial sale in accordance with law and the terms of the safety deposit box contract. Proposed law retains present law and provides that a lessee of a safety deposit box may designate up to two persons as authorized contacts who the bank is required to contact if the Page 5 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. SB NO. 268 SLS 20RS-452 ENGROSSED safety deposit box is abandoned by the lessee. Proposed law allows banks to dispose of unsalable contents. Proposed law provides that proceeds remaining after satisfaction of a bank's lien be subject to the Uniform Unclaimed Property Act of 1997. Proposed law allows a bank to treat remaining proceeds as presumed abandoned and turn them over to the administrator of the State Unclaimed Property Program without having to wait for the passage of time delays set forth in R.S. 9:155. Proposed law provides procedures for the disposing of or selling of abandoned contents. Proposed law allows the following types of property to be classified as unsalable by an independent appraiser, an auctioneer, a pawn broker, or the bank and disposed of in the following manner: (1)Documents, writings, or photographs having little or no commercial value may be destroyed, excluding military medals and all associated documents. (2)Coins or currency with a face value of $20.00 or less that are valued at no more than twice the face value shall be treated as proceeds of a sale and used to satisfy the bank's lien and any excess proceeds remitted to the Louisiana Unclaimed Property Program. (3)Coins or currency with a face value greater than $20.00 that are valued at 125% or less of face value shall be treated as proceeds of a sale and used to satisfy the bank's lien and any excess proceeds remitted to the Louisiana Unclaimed Property Program. (4)Any other tangible item having an estimated sale value of $25.00 or less may be destroyed by the bank or donated by the bank to a charitable organization, provided that the aggregate value of the item from a specific abandoned safety deposit box does not exceed $250.00. Proposed law requires the bank to obtain an independent valuation of the contents by an independent appraiser, auctioneer, pawn broker, coin or collectibles dealer, a jeweler, or by any other person who is regularly engaged in the business of appraising, buying, or selling like merchandise, or any other combination thereof prior to a public or private sale of contents not classified as unsalable. Proposed law requires that any contents valued by an independent valuation that are more than one thousand dollars shall be sold for at least seventy-five percent of the independent valuation price at a public or private sale. Proposed law requires that any contents valued by an independent valuation that are less than one thousand dollars may be sold without a value restriction at a public or private sale. Proposed law requires firearms to be sold through a federal firearm licensed dealer, through an auctioneer who possesses a federal firearm license, or turned over to law enforcement. Proposed law requires any public or private sale of contents of an abandoned safety deposit box to be a commercially reasonable sale. Proposed law provides immunity to a bank and its directors, officers, employees, agents, and other representatives who act in accordance with the authority granted in proposed law from all civil and administrative liability. Proposed law provides that the provisions of proposed law shall be applicable to savings and Page 6 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. SB NO. 268 SLS 20RS-452 ENGROSSED loan associations chartered under the Louisiana Savings and Loan Association Law in the same manner as they are applicable to state banks. Proposed law provides that the provisions of R.S. 6:320 through 328 relative to safety deposit boxes and safekeeping shall be applicable to savings banks chartered under the provisions of the Louisiana Savings Bank Act of 1990 in the same manner as they are applicable to state banks. Effective August 1, 2020. (Amends R.S. 6:327(B) and (C); adds R.S. 6:320, 327.1, 771, and 1142) Summary of Amendments Adopted by Senate Committee Amendments Proposed by Senate Committee on Commerce, Consumer Protection, and International Affairs to the original bill 1. Adds provisions allowing a lessee of a safety deposit box to designate up to two persons who the bank must contact if the box becomes abandoned and requires the lessee to give the contact information of the designated persons. 2. Adds provisions requiring the bank to send notice to the designated persons that the bank is holding the contents of the abandoned safety box. 3. Adds an exception that military medals and associated documents cannot be destroyed. 4. Adds provisions relative to an independent valuation of safety deposit box contents and provides for the sale requirements of the contents. Page 7 of 7 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions.