The federal government is sitting on $16.5 billion worth of unredeemed U.S. savings bonds that have matured, some of which no longer earn interest. Not surprisingly, the U.S. Treasury hasn’t been very proactive about returning this money, and thousands of Americans don’t even know the bonds are out there.

Many savings bonds are purchased as gifts by parents, grandparents or relatives. Sometimes bonds were kept in Grandma’s safe deposit box or tucked away in a drawer, and the actual owners have no idea they even exist. After 20 or 30 years, you can see how many of these bonds were forgotten about or went missing.

States have tried to work with the U.S. Treasury to turn the responsibility of locating the owners of unclaimed savings bonds over to state Unclaimed Property offices. The problem is the federal government doesn’t want to give up the money. The U.S. Treasury doesn’t even want to give us names or other information to help get this money back in the hands of the people.

A few years ago, Louisiana joined several states including New Jersey in suing the federal government for unclaimed savings bonds. We lost in court, but the judge said we could have the standing to get the money back for taxpayers if the savings bonds were escheated to the states. That’s what the State of Kansas did in 2013 and won.

Kansas was the first state in the nation to take the U.S. government to court to escheat unclaimed savings bonds. The state was successful and was able to collect $861,908 from the U.S. Treasury. Kansas sued the federal government for savings bonds in the hopes of collecting $160 million belonging to its residents.

A bill moving through the Louisiana Legislature follows in the footsteps of Kansas and is the next step in recovering savings bonds for Louisiana residents. SB 603 by Sen. John A. Alario, Jr. would escheat around $484,000 in unclaimed savings bonds to the state and enable us to sue the federal government for unclaimed savings bonds belonging to Louisianians.

If Louisiana is successful in this effort, we could eventually collect $100 million to $200 million in savings bonds from the federal government to return to Louisiana taxpayers, for whom this money is owed. SB 603 could be the state’s best shot at recovering unclaimed savings bonds for the people of Louisiana.

Contact:
Sarah Mulhearn
(225) 342-0012
smulhearn@treasury.state.la.us