REGULATION ON INACTIVE BANK ACCOUNTS AND CONSEQUENCES ON YOUR ASSETS HELD IN ACCOUNT
Since 1 January 2016, new obligations have been imposed on banks concerning the management of inactive bank accounts.
Law no. 2014-617 of 13 June 2014, known as the Eckert law, reinforces the legal framework for inactive bank accounts and provides that an account must be transferred to the Caisse des Dépôts et Consignations after a period of inactivity of 10 years (3 years for deceased holders).
This new regulation introduces a definition of inactive accounts and imposes new obligations on banking institutions to identify bank accounts and inactive safe deposit boxes, on informing clients and their beneficiaries and organizing the deposit of assets to the Caisse des Dépôts et Consignments then their attribution to the State.
Any individual client (major, minor, protected major) and any corporate legal person (companies, associations, actors of the public economy) may be affected by this law.
In the event of inactivity of your accounts and/or safe deposit boxes, the bank will have to regularly inform you of the observation of the inactivity and the consequences in case of maintenance of the inactivity during this time.
For more details, here are the main new elements from the provisions applicable to the accounts and the safe deposit boxes (this communication does not concern provisions relating to life insurance contracts, which must be applied by the insurers and not by the banks).
This does not apply to you if you regularly conduct transactions on at least one of your accounts or if you regularly present yourself at your bank (by consulting your accounts remotely, by exchanging with your agency by mail or e-mail, by signing a proof of your presence at an in-agency appointment). And if your bank accounts are active, your safe deposit box is automatically considered active.
WHAT IS AN INACTIVE ACCOUNT?
A bank account is considered to be inactive if, at the end of a 12-month period, the following two conditions are met:
The account has not been the subject of any transaction except for the recording of interest and debit by the institution holding the account, of fees and commissions of any kind, or payment of products or reimbursement of capital or debt securities.
The account holder, his/her legal representative or the person authorized by him/her having not been present under any form whatsoever at the institution for that account or for any other account opened in his/her name.
The deadline is extended to 5 years for securities accounts, passbook accounts, term accounts and accounts opened in the context of savings products. When amounts deposited on these types of accounts are unavailable for a certain period of time under statutory or contractual provisions, the 5-year period begins to run at the end of the period of non-availability.
In the event of death of the holder, inactivity is recognized when, at the end of a 12-month period following the death, no heir or beneficiary has informed the bank of his/her wish to assert his/her rights over the assets and deposits registered therein.
INFORMATION FOR INACTIVE ACCOUNT HOLDERS
If an account is deemed to be inactive within the meaning of the law, the bank must inform the account holder (or his/her beneficiaries in the case of a deceased holder).
This information comes into play once the inactivity is noticed and will be renewed every year. The holder may at any time reactivate his/her account by contacting the bank.
Without presentation of the account holder before the deadline imposed by the law, the account will be closed and the assets will be transferred to the Caisse des Dépôts et Consignations after a period of inactivity of 10 years (3 years for deceased holders).
A final information notice is sent 6 months before the expiry of this period.
TRANSFER OF ASSETS AND DEPOSITS FROM AN INACTIVE ACCOUNT
When an account is declared inactive, the bank is required to transfer deposits and assets held in the account to the Caisse des Dépôts et Consignations after 10 years from the last transaction or last presentation of the client or his representative (20 years of inactivity in case of a PEL [ownership saving scheme] alone).
For deceased holders, this deadline is reduced to 3 years after the date of death of the client whose account is inactive.
The deposit to the Caisse des Dépôts et Consignations is preceded by the closure of the inactive account.
In the case of securities accounts or PEA [share savings plans], the bank is obliged to sell the securities before transferring the liquidation proceeds (in euros) to the Caisse des Dépôts et Consignations. The Bank is not liable for any eventual loss of value generated by the liquidation.
To note: The non-transferable securities will continue to be deposited to the State at the end of the thirty-year prescription period.
The assets thus deposited in the Caisse des Dépôts et Consignations, which are not claimed by the account holder or his/her beneficiaries, shall be definitively acquired by the State after a period of 20 years of the date of deposit. This period is set at 27 years for inactive accounts of which the owner is deceased.
The information and documents concerning you (or your beneficiaries known to the bank) and those relating to your closed accounts will be archived by the bank in order to transmit them to the Caisse des Dépôts et Consignations when you file (or one of your beneficiaries files) an application for the return of deposited assets. This application to the Caisse des Dépôts et Consignations must take place before the end of the thirty-year prescription period, after which the funds are definitively acquired by the State (20 years after the funds have been deposited with the CDC, or 10 years after the deposit in case of PEL alone, or 27 years after the deposit in case of the death of the holder).
The Caisse des Dépôts et Consignations will examine each request for a refund in the light of the elements produced by the applicant and of the elements archived by the bank, in order to verify the identity of the applicant and determine the total sum to be repaid.
CASES OF INACTIVE SAFE DEPOSIT BOXES
A safe deposit box is considered inactive if there has been no presentation of the account holder (or beneficiaries for a deceased holder) or no operation in an account opened in his/her name for 10 years, and if, at the end of this period, the rental fee has not been paid at least once.
In case of inactivity, the bank informs the holder (or his/her heirs or known beneficiaries, if any) of the consequences linked to the inactivity of the safe deposit box. This information is renewed every 5 years.
After a period of 20 years from the date of the first unpaid payment, the bank is authorized to proceed to the opening of the safe deposit box and to produce its contents. The holder shall be informed of the implementation of this procedure 6 months before the expiry of this period. The Bank is authorized to liquidate the securities deposited in the safe deposit box and to sell the property deposited by public auction. The proceeds of the sale are repaid to the State, after deduction of the unpaid annual rental fees, the opening costs of the safe deposit box and selling costs.
No transfer is made to the Caisse des Dépôts et Consignations.
CASES OF INACTIVE ACCOUNTS FOR OVER 30 YEARS ON JANUARY 1, 2016
From January 1, 2016, the date of entering into force of the law, after informing the client, the accounts whose inactivity has been effective for more than 30 years will be liquidated and transferred to the State.
CUSTOMER DATA PROCESSING
In order to comply with the obligations of the Eckert law, and in compliance with the provisions of Law No. 78-17 of January 6, 1978, as amended, relating to data processing, files and freedoms, the bank shall set up a data processing system in order to identify the deceased holders of inactive accounts or inactive safe deposit box.
For individual customers, once the account or the safe deposit box has been inactive, the bank is obliged to consult (annually for the accounts and every 5 years for the safe deposit boxes) the Répertoire National d’Identification des Personnes Physiques [National Directory of Identification of Physical Persons] (RNIPP) in order to investigate the possible death of its client.
This file, kept by INSEE, is the representation of registers of civil status for people born in France and in the Overseas Territories. It also lists persons born abroad or in overseas communities, provided that they have been registered with the Social Security.
As part of its legal obligation to consult the RNIPP, the bank is required to process, either automated or not, the personal data of its clients. Such personal data shall be processed solely for the purpose of identifying the deceased holders of inactive accounts and/or inactive safe deposit boxes.
Within the framework of this aim, the bank is required to transmit your personal data to its provider and to entities in its Group.
The bank has taken the necessary measures to ensure the protection of the information transmitted, in accordance with the data protection act.
The natural persons concerned by the processing operations have a right of access to the personal data concerning them and may also request that the incorrect, incomplete or outdated data be rectified, updated or deleted and, subject to a legitimate reason, that personal data concerning them should be processed. These rights may be exercised at the agency where the account is opened.
- What happens to an inactive account? See the Mini Banking Guide N° 29 of December 2015 Published by the Fédération Bancaire Française
- The texts of this new system
You can see the text of the Eckert law n° 2014-617 of June 13, 2014 (in particular L.312-19 and L.312-20 of the Monetary and Financial Code), Decree No. 2015-1092 of August 28, 2015 and the order of September 21, 2015.
- Caisse des dépôts
See useful information on the Caisse des dépôts et consignations and its role in the system established by the «Eckert» law.