Letter to the Hon. Steven Mnuchin, Secretary of the Treasury - Senators to Sec. Mnuchin: Allow States to Find Rightful Owners of $24 Billion in US Savings Bonds

Letter

Dear Secretary Mnuchin:

We write to discuss the issue of matured, but unredeemed, U.S. savings bonds, which we would like to see returned to states in order to improve the prospects of identifying their proper owners and returning the proceeds of these bonds to them. This issue is of great importance to bond owners in all of our states, as well as many other states with title escheatment laws.
Currently, more than $24 billion of matured bonds remain unredeemed by their owners. Many of these matured and unredeemed, unclaimed bonds are either lost, stolen, abandoned, forgotten, or destroyed. Unfortunately, Treasury has not made any affirmative effort, neither historically nor currently, to contact the owners of these bonds to assist them in redeeming their bonds. After they have matured, these bonds are no longer earning interest and there is no financial reason for their owners to refrain from redeeming them. Treasury has historically taken the position that states could take ownership of these abandoned savings bonds through title-based escheatment, a process by which a state may take title to abandoned property to allow it to reunite the property with its original owner. However, in a December 24, 2015, regulation, Treasury reversed course, stating that savings bonds are not subject to escheatment, further adding that states now seeking to obtain title must physically possess the certificates that correspond to each of the abandoned bonds in question. Because by definition no one knows the location of the more than $24 billion of lost bonds in question, and only Treasury holds the last-known names and addresses of the bonds' owners, this rule effectively eliminates the states' ability to use their escheatment power to assist in the location and redemption of these bonds.
As you are aware, on August 8, 2017, the Court of Federal Claims affirmed states' rights to both escheat title to these savings bonds and to the information needed to locate original owners. Therefore, we urge you to withdraw the aforementioned December 24, 2015, regulation that makes it nearly impossible for states to reunite the rightful bond owners with the proceeds of these unclaimed bonds. Should the proceeds of these unclaimed bonds be transferred to the states, the states would be able to make every effort to reunite the owners or heirs with the proceeds of these unclaimed bonds using their highly-successful unclaimed property programs, which, in turn, would help restore public trust to the savings bond program.