Commercial banks operate on a national and global scale, serving millions of customers across multiple jurisdictions. With this reach comes significant responsibility, particularly when it comes to escheatment, the process of reporting and remitting unclaimed property to the state.
Unlike community banks, commercial institutions manage thousands of product lines, vast customer bases, and operations in dozens of states. A single oversight in escheatment can result in steep penalties, reputational harm, or lengthy audits. By approaching escheatment with the right systems, commercial banks can protect their compliance standing and preserve customer trust.
What Is Escheatment in the Commercial Banking Sector?
Escheatment requires financial institutions to transfer abandoned or unclaimed assets to the state after a set dormancy period. For commercial banks, escheatable property often includes:
- Dormant checking, savings, and business accounts
- Uncashed cashier’s checks, money orders, and official checks
- Unclaimed interest payments or dividends
- Credit balances and overpayments on corporate accounts
- Safe deposit box contents
- Escrow and loan overpayment refunds
Because commercial banks serve both retail and corporate customers, the range of escheatable property is broader and more complex than in smaller institutions.
Why Escheatment Is Especially Challenging for Commercial Banks
Commercial banks face challenges that are amplified by scale and complexity:
- Multi-jurisdictional compliance: National banks must track dormancy periods and reporting requirements across 50 states, each with its own rules and filing formats.
- High transaction volumes: Millions of accounts and instruments increase the risk of missing dormant property.
- Corporate accounts: Large commercial clients often maintain multiple accounts and subsidiaries, making ownership and contact tracking more complex.
- Audit exposure: Regulators closely scrutinize commercial banks, and incomplete documentation or missed reporting can trigger costly audits.
- Operational silos: Different departments may handle deposits, loans, and safe deposit boxes, complicating centralized compliance oversight.
Common Escheatment Scenarios for Commercial Banks
A Step-by-Step Approach to Escheatment for Commercial Banks
- Identify Dormant Accounts and Assets: Monitor activity across all product lines. Flag dormant accounts, uncashed checks, and undeliverable correspondence in line with each state’s dormancy rules.
- Conduct Due Diligence Outreach: Notify owners of dormant property through mail, phone, or digital channels. For corporate clients, outreach may involve multiple subsidiaries or authorized representatives.
- Report and Remit to the State: Submit state-compliant reports (often NAUPA format) and remit property through ACH, check, or other approved methods. Ensure reporting aligns with each jurisdiction’s requirements.
- Maintain Documentation for Audits: Retain account histories, communication records, and proof of reporting for 10–15 years to stay audit-ready.
How Eisen Helps Commercial Banks Manage Escheatment at Scale
Eisen’s compliance platform is built to support the complexity of large financial institutions, giving commercial banks the tools to simplify escheatment while reducing risk.
- Escheatment Manager: Centralizes dormant account tracking across all jurisdictions, automatically applying state-specific dormancy periods and generating accurate reports.
- Outreach Manager: Automates due diligence with verified addresses, delivery tracking, and pre-built notice templates.
- Disbursement Manager: Streamlines state remittances, ensuring accurate reconciliation and faster compliance.
With Eisen, commercial banks gain the confidence that every step of the escheatment process is handled efficiently, accurately, and in full compliance with state regulations.
The Bottom Line
For commercial banks, escheatment is more than a compliance requirement—it’s a matter of protecting institutional reputation and maintaining customer trust. With the scale of their operations, the risks are high, but so are the opportunities to implement streamlined, technology-driven solutions.
By partnering with Eisen, commercial banks can manage escheatment with confidence, reduce regulatory risk, and focus on what matters most: serving their customers and growing their business.
