Katrina's Aftermath Poses Distribution Dilemmas for Unclaimed Box Contents
David McGuinn, President
Safe Deposit Specialists
Houston, TX
sdspec@aol.com or www.sdspec.com
Refugee box owners, legal quandaries and box content contamination are the dilemmas faced by numerous financial institutions along the Louisiana and Mississippi Gulf Coast. Nearly three years after the Hurrican Katrina debacle, the owners of thousand of salvaged safe deposit box contents are still being sought.
Notices Go Unanswered
Scattered across the face of the U.S., those who fled Katrina's wrath left no forwarding address or hone numbers. Although financial institutions have made concerted efforts to locate these renters and reunite them with their property, phone calls, letters, and public notices have frequently gone unanswered. Local newspapers as well as newspapers in cities, towns and states close to the flooded areas have run advertisements in an effort to contact those who relocated from their flooded homes.
Regions Bank in Louisiana had 8,000 boxes that were flooded in the valuts of their eleven branches; 7,000 of these renters have been located and reclaimed their property. Many other financial institutions have not been this successful.
Donate or Destroy
Regions Bank has set a deadline for the disposal or redistribution of all salvaged items. They plan to destroy all water-soaked materials that have been "reduced to mush". They have also decided that any marketable box contents, not claimed by the deadline, will be donated to Brad Pitt's "Make It Right Foundation," which funds the construction of houses in New Orleans's devastated Lower Ninth Ward District. Because Regions does not want to appear to profit or otherwise benefit from so much tragedy and pain, these donated items will be sold at public auction or on Ebay by the foundation, with all proceeds goings to the Make It Right charity.
Some Don't Concur
Many other Gulf Coast financial institutions do not agree with this decision and have decided not to dispose of any of the property found inside the waterlogged boxes. They have taken a more conservative approach and believe that these safe deosit box contents are valuable items belonging to renters and they want to make sure these individuals have ample time to reclaim their property. Many Gulf Coast bank vaults now contain soggy unclaimed box contents from thosands of flooded safe deposit boxes.
One Mississippi bank still has a large quantity of flooded box contents that belong to numerous box renters. They are storing these items in double plastic bags that have been covered with charcoal to minimize the musty odor. These bags are presently stored in file cabinets and secured in the bank's vault under dual control at their downtown location.
Potential Liability
The prudent disposal of unclaimed property is a crucial consideration. Obviously, all of these flooded safe deposit items cannot be stored indefinitely. Historically, in most states, after a specified number of years, abandoned box contents are reported and/or remitted to the state treasury. Unfortunately, legal and health concerns appear to be two major obstacles facing many Gulf Coast financial institutions.
Retention Requirements
Legally, in Louisiana, intangible property held in safe deposit boxes or other safe keeping depositories is considered abandoned if it remains unclaimed for more than five years after the rental period expires. Any attempt to dispose of or destory these safe deposit items prior to the required five-year waiting period could result in significant liability for the institution it should also be noted that the five-year retention period is calculated beginning with the renter's due date, not when Hurricane Katrina came ashore or when the boxes were opened. Subsequently, som eof these box contents could possibly de retained for up to six years. The dispostion, destruction or donation of any property prior to the end of the calculated grace period could result in legal action against the financial institution and any recipient of the property or proceeds derived frm the sale of these items at public auction.
Health Issues
Contamination is the other factor that hamstrings the disposition process. The Mississippi treasury will not accept any unclaimed safe deposit property, and the Lousiana treasury does not accept "tangible" unclaimed property such as collectable baseball cards or jewelry. Financial institutions have contact other state unclaimed property departments, and they have all declined to accept these abandoned contents because of potential contamination. This threat of contamination has also barred Louisiana's traesury from accepting intangible flood-tainted items. This would include checks, CDs, stocks, bonds and other paper documents that the state would normally receive. Bottom line: nobody wants these soggy safe deposit contents.
In Conclusion
Financial institutions must be very careful and conscientious when they provide safe deposit services to consumers. Strict adherence to all safe deposit regulations must be followed to the letter. Without strict compliance of these state laws, you could expose yourself to unlimited liability.
