Answer:
Answer by Ken Golliher: "Dormancy" is a concept generally applied to accounts where there has been no activity. The time frames vary from bank to bank. Oftentimes, dormant accounts are segregated for special handling, thus justifying enhanced fees. However, I do not see any way that the concept applies to an uncashed official check.
Assume an official check issued 4 years ago has been subjected to a "dormant" fee, but the check is then presented for payment through the clearing system. It is an official obligation of your bank; how could you pay less than the face amount?
After an official check has been outstanding for a period established by state law, the funds are to be escheated to the state. Individual states have, in my opinion justifiably, gotten much more aggressive in dealing with banks whose practices are aimed at converting abandoned property to fee income. Check the laws in your state. Do not assume that the fact it may not be addressed in your state's laws is an indicator that you can do whatever you want. Any rationale supporting a fee here is pretty thin.
Answer:
Answer by John Burnett: Although the OCC has opined that national banks are not subject to any state law that would prohibit the assessment of a dormancy fee. See Banking Circular 148 from 1980, which remains on the OCC's Current list. The matter is also discussed obliquely in the OCC's recent proposal to amend its regs to clarify the fuzzy bright line between OCC turf and state turf.
First published on BankersOnline.com 11/3/03
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