For Immediate Release: 26 September 2001

Contact: Bryan M. Clark, Ohio PIRG 614-460-8732 (office) 614-214-9807 (mobile) Art Jaeger, CFA 202-387-6121

Workers' Wages Threatened: Senate Bill Could Cost $4 Million In Unclaimed Pay

Columbus, OH - A measure currently under consideration in the Ohio State Senate could cost Ohio's wage earners about $4 million per year, according to the Consumer Federation of America (CFA) and Ohio Public Interest Research Group (Ohio PIRG). Senate Bill 93 would exempt wages of $100 or less from reporting requirements under Ohio's unclaimed funds law. Currently, four out of five of Ohio's 2.2 million unclaimed funds accounts fall below the proposed $100 reporting requirement.

"Consumers have a right to their unclaimed funds, regardless of the amount," stated Bryan M. Clark, Legislative Advocate for Ohio PIRG. "To ease allegedly burdensome paperwork for a few businesses, this bill will put millions of Ohioans' wages back into company pockets."

Under current law, unclaimed employee wages over $50 must be turned over to the State, an increase from the recent $25 threshold. Once placed in the hands of the Division of Unclaimed Funds, the State attempts to locate the funds' owner and refund the money. Senate Bill 93 would further increase the threshold to $100, thus allowing companies to keep employee wages below that amount.

"The State of Ohio cannot refund money that it never receives," said Art Jaeger, Assistant Director with CFA. "Senate Bill 93 would keep wage earner's money out of the Division of Unclaimed Funds - and in the hands of businesses."

The groups also point out the impact of Senate Bill 93 on current state program funding. The Ohio Housing Finance Agency currently utilizes unclaimed funds to make housing loans available to low- and moderate-income households. Passage of Senate Bill 93 could adversely impact the funding of this program, according to bill opponents. Opponents also express concern that approval of Senate Bill 93 could further erode consumer protection under the state's unclaimed funds program.

"Ohio's government should safeguard consumers' assets, not give additional concessions to businesses," stated Clark.

Ohio Public Interest Research Group is a non-profit, non-partisan, state-based advocate for the public interest. Our mission is to deliver persistent, results-oriented activism that encourages a fair, sustainable economy, protects the environment, and fosters responsive, democratic government.

Consumer Federation of America is an association of approximately 285 pro-consumer groups formed in 1968 to advance the consumer interest through advocacy and education. CFA's positions are determined by its members, who vote on them at annual meetings.

26 September 2001

The Honorable Doug White
Chair, Finance &
Financial Institutions Committee
Senate Building Room 127, First Floor
Columbus, Ohio 43215

Dear Senator White:

On behalf of taxpayers and wage earners, the Consumer Federation of America and Ohio Public Interest Research Group ask that you reject Senate Bill 93, which would exempt wages of $100 or less from coverage under Ohio's unclaimed funds law. In the name of easing paperwork burden on business, this bill would allow employers to pocket millions of dollars in wage checks belonging to Ohio's workers.

Unclaimed funds are a nationwide problem. There are more than $10 billion in unclaimed assets in the 50 state treasuries. In general, states are doing a better job of seeking out the owners of these assets and refunding their money. That includes Ohio, which returned nearly $28 million in assets in fiscal year 2001, up from $23 million in the previous year.

Still, Ohio today is custodian of more than 2.2 million unclaimed fund accounts. Four our of five of these are for less than $100 and their total value is $50.8 million. That's approximately 13 percent of all unclaimed funds in the state's hands, although not all of these accounts are for wages. If these accounts continue to be reported to the state, Ohio's Division of Unclaimed Funds will attempt to locate the rightful owners and refund their money.

But Ohio cannot refund assets it never receives. An earlier change raised the reporting threshold from $25 to $50, and unclaimed gift certificates - covered in many other states - also are exempt under Ohio's law.

According to the Commerce Department, approving Senate Bill 93 would mean an additional annual loss to Ohio workers of about $4 million. Testifying before your committee, David Moore, unclaimed funds division superintendent, said approving this exemption also could affect the Ohio Housing Finance Agency, since OHFA uses unclaimed funds to provide and guarantee loans for low- and moderate-income households. Finally, Moore said, approving this bill would open the flood gates to still more exemptions that eventually could "eviscerate" the state's unclaimed funds program.

There is no need for additional concessions to business on unclaimed funds. An exemption for business-to-business transactions was passed last year and unclaimed funds reporting requirements have been streamlined.

Consumers, on the other hand, have a right to their unclaimed assets and the state governments have a responsibility to safeguard these assets as much as possible. As David Moore noted in his testimony, "individual taxpayers should be able to rest easy knowing that, if their accounts have become dormant, they will be remitted to the (state) as custodian." For this reason and because of its potential impact on state programs, please reject Senate Bill 93.

Sincerely,

(signed)
Arthur S. Jaeger
Assistant Director
Consumer Federation of America

(signed)
Bryan M. Clark
Legislative Advocate
Ohio Public Interest Research Group