The Gold Book

Under a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), insured depository institutions may pay interest on demand deposit accounts (DDAs) starting July 21, 2011. Under another section of the Dodd-Frank Act, the FDIC provides unlimited deposit insurance for noninterest-bearing transaction accounts through December 31, 2012.  If on or after July 21, 2011, an insured depository institution modifies the terms of a DDA so that the account may pay interest, the institution must notify affected customers that the account no longer will be eligible for unlimited deposit insurance coverage as a noninterest-bearing transaction account.

The IRS has recently issued announcement 2011-40 which provides for mid-year adjustments to the 2011 mileage rates. The rates were changed to reflect the increase in gas prices since last year.

Effective July 1, 2011, the business standard mileage rate will rise to 55.5 cents per mile and the medical/moving mileage rate to 23.5 cents per mile. The charitable standard mileage rate remains at 14 cents per mile for the remainder of 2011.

The standard mileage rate is used by taxpayers to deduct costs of operating vehicles for business purposes. The standard rate is also used by many businesses to reimburse employees for mileage. The moving/medical rates are used to compute deductible costs of operating a vehicle for medical or moving purposes. The charitable mileage rate is used to determine vehicle costs for charitable purposes.

Please be advised that on March 31, 2011, New York passed amendments to the Abandoned Property Law. The new law, effective immediately and due with the next reporting cycle, provides the following:

Lower dormancy periods (from 5 years to 3 years) for the following property types:

• Money or securities held in escrow, but excluding escrow accounts for which the duty or obligation for which such amount was deposited has not been performed and such performance is still required
• Amounts due on deposits or any amount to which a shareholder of a savings and loan or a credit union is entitled
• Accumulations of interest or other increments held by a bank for payment of an interest in a bond and mortgage apportioned or transferred by it

In addition to adjusting dormancy periods, the new law also amended New York’s reporting provisions.  There are three major changes to keep in mind for your next report to New York:

1.       Publication requirements: Every banking organization must publish on or before September 1st of each year a notice naming potential owners of unclaimed property being held by the banking organization.  This provision provides a little more flexibility in that the previous requirement mandated that the banking organization had to publish the notice within 30 days of filing their report.

2.       Preliminary reports no longer required: Certain industries (mainly in the financial services industry) were required to file a preliminary report and conduct a publication prior to remitting a final report/remittance.  This bill removes the preliminary report requirement.  The bill further confirms the reporting deadlines and cut-off dates.  Once the statutory due diligence and publication requirements have been satisfied, the report and remittance would be due (for banking institutions) by November 10th.

3.       Miscellaneous: NY State law still mandates that all unclaimed funds valued at $20 and higher follow the statutory due diligence requirements.  The State Controller’s Office posts all owners entitled to property valued at $20 and higher on their website for at least one year.Gift cards remain at a 5 year dormancy period.

Please check back soon for as we continue to update the Abandoned Property section of The Gold Book.