WASHINGTON - A simmering feud between state and federal officials over abandoned deposits at failed banks and thrifts could trigger the introduction of legislation in Congress next year to protect owners of the money, an influential lawmaker said yesterday.

Rep. Barney Frank, D-Mass., vowed to seek approval of legislation next year if necessary to "ensure these people get their money."

About $30 million at failed banks and thrifts has been identified as abandoned, or unclaimed, though more than $500 million could ultimately be at stake, according to Rep. Frank Annunzio, D-Ill., whose financial institutions subcommittee of the House Banking Committee yesterday held a hearing on the issue.

Abandoned property can arise when a depositor moves to a new residence without notifying the bank of a new address, or upon the death of a depositor.

While treatment of abandoned property at failed financial institutions is of obvious importance to depositors, the stakes are equally high for state treasuries, the Federal Deposit Insurance Corp., and the Resolution Trust Corp.

Generally, abandoned deposits at banks and thrifts are turned over to state unclaimed property administrators. Those state officials then attempt to find the rightful owners of the money, but in the meantime the states have use of the funds.

Underscoring the importance of unclaimed property to state coffers, Marcella Easley, president of the National Association of Unclaimed Property Administrators, told the subcommittee that states collect about $1 billion of abandoned property annually. States are able to locate about 30% of the owners, said Ms. Easley, who also is Oregon's unclaimed property administrator.

In the case of bank or thrift failures, federal liquidators take the money. They claim that federal law requires and entitles them to take the cash after an 18-month period in which depositors can make a claim for the money. Representatives of the FDIC and RTC yesterday said they make every effort to find the rightful owners of the property, but that after 18 months unclaimed money becomes theirs.

The FDIC liquidates failed banks, while the Resolution Trust handles thrift failures.

Joseph D. Malone, Massachusetts treasurer and receiver general, said at the hearing. however, that there is no clear provision in federal law supporting the liquidators' claims that they are entitled to hold the unclaimed money. Moreover, he said, the federal government cannot be trusted with the job.

"Certainly, given the inherent conflict of interest as disburser of insurance funds ... the FDIC cannot be entrusted with this responsibility," he said.

William H. Roelle, senior vice president and chief financial officer of Resolution Trust, told the subcommittee that only 0.03% of deposits, or $29.8 million, remained unclaimed after 18 months.

But Rep. Frank said federal liquidators were being callous.

"Individual savers do not live by federal aggregates," he said. "There's no reason the feds should take the money. If the FDIC and RTC feel their hands are tied by the law, we can change it."

Nebraska Treasurer Dawn E. Rockey, appearing on behalf of the National Association of State Treasurers, said states are in a better position than the federal government to locate owners of abandoned property.

"States are doing a great deal to return these funds to the rightful owners." Ms. Rockey said. "The states are not stopping at passing some form of [law] and then cooling their heels."

Ms. Rockey, in describing the lengths to which states go to find owners of unclaimed deposits, added, "I sincerely doubt that the federal government would operate booths at state fairs or local events."

Mr. Roelle said he applauds the efforts states make to find the rightful owners of abandoned property and said there is nothing preventing federal liquidators and state officials from working together. He also offered a spirited defense of the federal government's work to find owners.

"We make an extraordinary effort," he said. "Our efforts are substantial."

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