Concerns Raised About Michigan Unclaimed Property Practices
Until the end of last month, Michigan was offering a voluntary compliance program for holders to come into compliance with the Michigan Unclaimed Property Act. That amnesty program was just the latest effort by Michigan to bring more unclaimed funds into the state’s custody. Earlier last year, Michigan significantly overhauled its unclaimed property laws, changing most dormancy periods from 5 years to three years. As we explained when the bill was proposed, the Michigan Legislature expected these changes to increase state revenue by more than $200 million over the next to years.
It seems, however, that not everyone is happy with Michigan’s aggressive unclaimed property collection. For example, the State Bar of Michigan recently sent a letter to the state Treasury Department that was critical of the terms of the state’s notices to holders in connection with the amnesty program. Similarly, the National Federation of Independent Businesses is lobbying against Michigan’s practice of performing third-party unclaimed property audits of small businesses. To that end, the NFIB is supporting legislation in the Michigan House that would create a business to business exemption. We first mentioned that bill last summer, and it is still pending. According to the NFIB, the bill “is being held up by Treasury officials that do not like the language.” The Treasury Department has not responded to these claims. We will continue to follow the bill.