INDUSTRY U P DAT E S
SAFE DEPOSIT
BOXES
O P T I O N A L V S . M A N D AT O R Y
by Hunter Windle
T
he Arkansas Auditor of State recently sent banks a “Directive for Holders of Safe Deposit Boxes”, dated June 17, 2021, in order to remind banks of existing law. While the directive did
not technically misstate law, it initially confused and concerned many bankers because it seemed to suggest that banks had obligations concerning safe deposit boxes that extended beyond the scope of existing law. Subsequent conversations with the state resolved some of these concerns but, in light of the directive, it seems a good time for a more banker-friendly reminder of existing law regarding unpaid and unclaimed safe deposit boxes. There are two main sections of the Arkansas Code that involve safe deposit boxes. The first section, A.C.A. § 18-27-102, describes, among other things, the auction process banks and other box holders may take to recover rental fees and costs for unpaid safe deposit boxes. The
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second section, the Unclaimed Property Act, A.C.A. § 18-28-201, et seq., describes the process banks and other box holders must take to remit the contents of unclaimed safe deposit boxes to the state. Under § 18-27-102, banks may sell the contents of unpaid safe deposit boxes at public auction. Despite language in the directive directing banks to sell box contents, the auction process is entirely optional under existing law. If a box is unpaid for at least six months, a bank may open the box after providing at least thirty days’ notice by certified, return receipt mail to the lessee’s last known address. The box must be opened in the presence of two bank employees, one of whom should be an officer or manager, and a notary public. The bank must then inventory the box and place the contents in a sealed container to be stored subject to its lien for the unpaid rental fees, costs of opening the box, and any damages connected therewith. If the amount owed is not paid within two years, the bank may then
