Eckert Act

REGULATIONS ON INACTIVE BANK ACCOUNTS AND CONSEQUENCES FOR ASSETS

Since 1 January 2016, new obligations have been imposed on banking institutions regarding the management of inactive bank accounts.

Law 2014-617 of June 13, 2014, known as the "Eckert" Law, defines the legal framework for inactive bank accounts and provides for an account to be transferred to the Deposit and Consignment Fund after a period of ten years of inactivity (three years for deceased account holders).

This new regulation sets forth a definition of inactive accounts and imposes on banks new obligations to identify inactive bank accounts and safe deposit boxes and provide information on customers and their successors in title. It also arranges for assets to be deposited in the Deposit and Consignment Fund and then assigned to the State.

Any individual customer (of legal age, a minor or a protected person of legal age) or customer with legal entity status (companies, associations, actors in the public economy) may be affected by this law.

If your accounts and/or your safe deposit boxes are inactive, the bank must regularly inform you of such inactivity and its consequences in the event it persists over time.

More information on the main new features arising from the provisions that apply to accounts and safe deposit boxes is given below (this communication does not deal with provisions relating to life insurance contracts, which must be applied by insurers and not banks).

To be taken into account

This provision does not affect you if you regularly perform transactions in at least one of your accounts or if you regularly visit your bank in person (by checking your accounts remotely, contacting your branch by post or email, or signing a document to prove that you have attended an appointment at your branch). Furthermore, if your bank accounts are active, your safe deposit box is also automatically considered to be active.

WHAT IS AN INACTIVE ACCOUNT?

A bank account is considered to be inactive if, after a period of 12 months, the following two conditions are met:

The account has not been subject to any transaction other than the addition of interest and charges made by the bank in respect of expenses and fees of any kind, payments for products or reimbursement of capital or credit securities.

The account holder, their legal representative or the person empowered by the latter has not visited the premises in any way in connection with either this account or any other account open to their name.

The term is extended to five years for securities accounts, passbook accounts, fixed-term accounts and accounts opened within the savings products framework. As the amounts deposited in these types of accounts are not available for a certain period under legal or conventional provisions, the five-year period commences at the end of the period of non-availability.

In the event of the account holder's death, inactivity is confirmed if, once a period of 12 months has elapsed after the death, no heir or successor has informed the bank of his or her willingness to assert his or her rights over the assets and deposits recorded in these accounts. 

INFORMATION FOR HOLDERS OF INACTIVE ACCOUNTS

If an account is classified as inactive as provided for by law, the bank must inform the account holder (or their successors in the event of a deceased account holder) of such fact.

This information is conveyed once when the inactivity is noted and then repeated every year. The account holder may activate their account again at any time by contacting the bank.

Law 2014-617 of June 13, 2014, known as the "Eckert" Law, defines the legal framework for inactive bank accounts and provides for an account to be transferred to the Deposit and Consignment Fund after a period of ten years of inactivity (three years for deceased account holders).

A final communication will be sent six months before this deadline expires.

TRANSFERENCE OF THE ASSETS AND DEPOSITS OF AN INACTIVE ACCOUNT

Once an account is declared inactive, the bank must transfer deposits and assets from it to the Deposit and Consignment Fund after a term of ten years has elapsed since the final transaction or the last communication from the customer or their representative (20 years of inactivity in the event there is only one PEL).

For deceased account holders, this term is reduced to three years after the date of death of the customer whose account is inactive.

The account must be closed before amounts can be deposited in the Deposit and Consignment Fund.

In the case of securities or PEA accounts, the bank must sell the securities before transferring the settlement product (in Euros) to the Deposit and Consignment Fund. The bank will not be liable in the event of any depreciation generated by the settlement transaction.

To be taken into account: Non-transferable securities will continue to be held by the State at the end of the thirty-year limitation period.

Assets deposited in the Deposit and Consignment Fund that are not claimed by either the account holder or their successors will become the property of the State after a period of 20 years from the date of their deposit. This term is set at 27 years for inactive accounts where account holder has died.  

The bank will file any information and documents concerning the account holder (or their successors who are known to the bank), as well as any information about closed accounts, so it may be transferred to the Deposit and Consignment Fund in the event the account holder (or one of their successors) submits a request for reimbursement of the deposited securities. Requests to the Deposit and Consignment Fund must be submitted before the thirty-year limitation period ends. If no such request is received, at the end of said period ownership of the amounts at issue will be transferred to the State (20 years after the funds have been deposited in the CDC, 10 years after they have been deposited if there is only one PEL, or 27 years after said deposit in the event of the account holder's death).

The Deposit and Consignment Fund will examine all claims for reimbursement in the light of the evidence provided by the applicant and the documents filed by the bank to verify the identity of the applicant and shall determine the amount of the sums to be refunded.

INACTIVE SAFE DEPOSIT BOXES

A safe deposit box is considered to be inactive if the owner cannot be found (or if no successors can be found for a deceased account holder), or if there is no record of any transactions having been made in an account opened under the owner's name within a period of ten years and if, at the end of this period, the costs of leasing the box have not been paid at least once.

In the event of inactivity, the bank will inform the account holder (or their heirs or known successors, if applicable) of the consequences of an inactive safe deposit box. This information is repeated every five years.

At the end of a period of 20 years from the date of the first non-payment, the bank is authorized to open the safe deposit box and to verify its contents. The holder will be informed about this procedure six months before the above period expires. The bank is authorized to liquidate the securities deposited in the safe deposit box and sell the deposited assets at public auction. The proceeds from the sale will revert to the State after the unpaid amounts to lease the box and the costs incurred to open it and sell the contents have been deducted.

No amounts will be transferred to the Deposit and Consignment Fund.

ACCOUNTS THAT ARE INACTIVE FOR MORE THAN 30 YEARS AT JANUARY 1, 2016

From January 1, 2016, which is when the law enters effect, accounts that have been inactive for more than 30 years will be settled and transferred to the State, after the customer has been informed of such procedure.

PROCESSING CUSTOMER DETAILS

In compliance with the Eckert Law and in accordance with the provisions of Law 78-17 of January 6, 1978 (amended) on Information Technology, Files and Freedoms, the bank uses a data processing system to identify deceased account holders and inactive safe deposit boxes.

In the case of individuals, from the time an account or a safe deposit box is deemed to be inactive, the bank must consult the National Register of Identification of Individuals (RNIPP) to check if the customer has died (annually for accounts and every five years for safe deposit boxes).

This file, which is kept by INSEE, reflects the civil status records of people born in France and in the DU, and people born abroad or in overseas communities, provided they have been registered with the Social Security Institute.

Within the framework of its legal obligation to consult the RNIPP, the bank must hold the personal data of its customers on either an automated or non-automated format. This personal data is processed solely for the purpose of identifying deceased holders of inactive accounts and/or safe deposit boxes.

Within this framework, the bank must convey such personal data to the owner of said data and to companies in its group.

The bank takes the appropriate measures to ensure that the data conveyed is protected, in accordance with the Law on Information Technology and Freedoms.

Individuals affected by these processes have the right to access their personal data and may also request that it be corrected or updated, demand that any inaccurate, incomplete or obsolete data be deleted, or object to their data being processed whenever a legitimate reason for this can be provided. These rights can be exercised at the branch where the account is open.

For more information

- What happens to an inactive account? See the Quick Banking Guide no. 29, of December 2015, published by the French Banking Federation

http://www.lesclesdelabanque.com/Web/Cdb/Particuliers/Content.nsf/DocumentsByIDWeb/8TMDBB?OpenDocument

  - The texts of this new mechanism

You can consult the text of the "Eckert" Law 2014-617 of June 13, 2014 (mainly articles L.312-19 and L.312-20 of the Monetary and Financial Code), Implementing Decree n° 2015-1092 of August 28, 2015 and the Decree of September 21, 2015.

https://www.legifrance.gouv.fr

  - Deposit fund

See the useful information on the Deposit and Consignment Fund and its function within the mechanism established by the "Eckert" Law.

https://www.caissedesdepots.fr/en/dormant-accounts-and-unclaimed-life-insurance-contracts