By Donya Parrish, MCU VP- Risk Management
If you are on the supervisory committee for your credit union, dormant account reviews should be on your “to do” list. What is a dormant account? It is generally a deposit account that has had no deposit or withdrawal activity for a long enough period that the credit union has likely discontinued sending statements and is waiting for it to fee out, be closed, or escheat to the state of Montana as abandoned property (when the time comes — generally five years after the last activity).
Why is this of concern to your committee? Great question, and one that this article addresses. The fact that these accounts are a bit “out of sight, out of mind” makes them an attractive target for internal fraud. NCUA also addresses them in the NCUA Supervisory Committee Audit Guide on page 21 with some best practices for segregation of duties and review of these accounts.
If it is not part of your process, consider adding it. Many data processing systems have controls and reports that might assist you in identifying dormant accounts and seeing when activity resumes.