Dormant Accounts (Jersey) Law 201-: Consultation: Response

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A decision made 5 February 2013:

Decision Reference: MD-E-2013-0019

Decision Summary Title :

Proposed Dormant Accounts (Jersey) Law 201-

Date of Decision Summary:

30/01/2013

Decision Summary Author:

Director,

Finance Industry Development

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title :

Presentation of response to consultation on proposed Dormant Accounts (Jersey) Law 201- and allocation of law drafting time

Date of Written Report:

30/01/2013

Written Report Author:

Director,

Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Proposed Dormant Accounts (Jersey) Law 201- and release of response to consultation and allocation of law drafting time.

Decision(s):

The Minister decided:

(i) To present EDD’s Response to the Consultation Paper on the introduction of a dormant accounts law as an ‘R’; and

(ii) To request the allocation of law drafting time to the drafting of a Dormant Accounts Law for Jersey.

Reason(s) for Decision:

Consultation was broadly supportive of the proposed new law and the response paper sets out the nature of the responses from industry, members of the public and other interested parties and EDD’s response to them.

This type of law offers advantages for the banks while preserving the rights of the customers and releases dormant funds for use in the local community to support “good causes”.

Resource Implications:

There are no financial costs for the States as a result of this decision. There will be some manpower implications for Treasury who will need to manage the Fund of dormant balances and process annual and half-yearly payments to and from the Fund however it is thought that no additional headcount will be needed and any costs will be recharged to the reclaim fund.

Action required:

(i) The Greffier of the States to be requested to arrange for the Report to be presented to the States in due course.

(ii) The Director of Finance Industry Development to distribute the Response to the Consultation Paper to all relevant stakeholders.

(iii) Officers to undertake the necessary arrangements for the request to be passed to the Law Draftsman.

Signature:

Senator Alan Maclean

Position:

Minister for Economic Development

Date Signed:

Date of Decision (If different from Date Signed):

Dormant Accounts (Jersey) Law 201-: Consultation: Response - Law Drafting Allocation

MINISTER FOR ECONOMIC DEVELOMENT

REPORT ON:

Proposed Dormant Accounts Law: Release of response to consultation and allocation of law drafting time for the drafting of the proposed dormant accounts law.

Introduction

The purpose of a Dormant Accounts Law is to enable funds standing to the credit of “dormant” bank accounts (i.e. accounts where contact has been lost with the customer or where no instructions have been received from the customer for a period of at least 15 years) to be collected from the banks and paid into a central fund from which monies can be paid out to support a number of “good causes” in the local community, thus enabling lost or forgotten funds to be put to good use in Jersey. This type of scheme also has advantages for the banks in allowing them to remove these liabilities from their balance sheets. The rights of the customer are preserved, however, and the customer can still claim for repayment from the central fund (via his bank) at any time.

Dormant account schemes already exist in a number of jurisdictions, including the UK, Ireland and the Cayman Islands. The introduction of a dormant accounts scheme is also underway in Guernsey and the Isle of Man.

Consultation

In December 2008 EDD commenced a consultation exercise in respect of a proposed Dormant Accounts Law.

The overall response to the consultation was positive but due to other pressures on the department, the proposal was put to one side for a time. The closure of certain local banks has highlighted the usefulness of this type of legislation from the perspective of the banks and has brought it back on to the agenda. Indications from the banking industry are that they would like to see a co-ordinated, consistent approach and common timetable among Jersey, Guernsey and the Isle of Man.

The Department has now prepared a response document setting out the nature of the responses it received to the consultation document and its own replies to some of the comments made (a copy of the response is attached). The Department has also begun preparation of law drafting instructions to allow drafting of the law and an accompanying order to begin.

Financial and manpower implications

There are no financial implications for the States of Jersey that would arise from the adoption of a dormant accounts law as the scheme will be self-financing and most of the administration will be done by the banks.

Any manpower requirements for the “Jersey Reclaim Fund” from Treasury in managing the fund will be met by recharging the costs, if any, to the reclaim fund.

Director, Finance Industry Development

30 January 2013