WASHINGTON - The chairman and ranking Republican of the House Banking Committee last week introduced legislation that would permit all the states to share unclaimed securities distributions.
For years, New York has seized all unclaimed distributions held by banks or securities firms within its borders.
Unfair Windfall Cited
Between 1985 and 1991, those distributions of interest or dividends amounted to $630 million, said committee chairman Henry B. Gonzalez, D-Tex.
Delaware sued, and the Supreme Court ruled in March that unclaimed funds would go to the state of incorporation of the financial institution holding the funds.
"This opinion could unfairly result in a larger windfall for the states of Delaware and New York, since most financial intermediaries are incorporated in those states," Mr. Gonzalez said.
The legislation introduced by Rep. Gonzalez and Rep. Jim Leach, R-Iowa, would direct unclaimed dividends and interest to the states in which the executive offices of the issuer of the security was located.