This blog was last updated on June 3, 2026

By Freda Pepper, General Counsel, Unclaimed Propert 

The federal government is taking coordinated action on state unclaimed property practices. In mid-April 2026, Congress launched both legislative and investigative initiatives targeting what lawmakers characterize as the “premature seizure” of investment assets. On April 15, Senator Elizabeth Warren, Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, sent a detailed oversight letter to the National Association of Unclaimed Property Administrators (NAUPA) demanding comprehensive data on state escheatment practices.  

The very next day, Representative Liccardo introduced H.R. 8338, titled, the “Safeguarding Americans’ Fairly Earned Retirement Act of 2026” (SAFER Act).  The proposed law would establish new federal standards limiting when states can take custody of securities, digital assets, and investment accounts. 

While we cannot definitively know Senator Warren’s motivations behind the timing of her letter, the simultaneous emergence of both initiatives suggests a coordinated federal strategy to address investor protection concerns. The SAFER Act provides the legislative framework, while Senator Warren’s inquiry supplies the data-driven oversight that could inform future policy decisions or support the bill’s premises. 

The SAFER Act 

The SAFER Act represents the most significant federal intervention in state escheatment authority in decades. The bill creates a two-tier framework on the remission of unclaimed property to the states that are based on account ownership.   

1. For accounts owned by natural persons (individuals), financial institutions may not remit covered assets to states unless all of the following conditions are met: 

• The institution has confirmed the account owner’s death at least three years before escheatment 
• No estate fiduciary has expressed interest in the asset for at least three years 
• For jointly owned assets, there is confirmation of death of all owners  2.For accounts owned by entities (non-natural persons), escheatment cannot occur until the financial institution has no record of contact with a representative of the entity for at least five years. 

2. For accounts owned by entities (non-natural persons), escheatment cannot occur until the financial institution has no record of contact with a representative of the entity for at least five years. 

This proposed framework would override existing state dormancy criteria and dormancy periods for covered assets.   

The bill also imposes mandatory death verification requirements reminiscent of those imposed on life insurers. For accounts owned by individuals who have reached retirement age (currently age 73), financial institutions must conduct comparisons against death databases after five years of no contact, and then every five years thereafter. 

The SAFER Act requirements do not apply to all property types, instead its application is limited to the following: 

• Securities (as defined under the Securities Exchange Act of 1934) 
• Digital assets (digital representations of value on cryptographically-secured distributed ledgers) 
• Investment accounts (accounts used to hold, manage, buy, sell, or trade securities or digital assets, including IRAs) 
• Proceeds from sales and related payments (dividends, principal, forks, airdrops) 

The bill includes an explicit preemption clause stating it “preempts any State law, regulation, ordinance, or other provision” that conflicts with its requirements. However, a “Sense of Congress” provision seemingly preserves certain state powers. Indeed, the states may maintain due diligence requirements, reporting obligations, and other compliance mandates that don’t directly conflict with the custody-yielding restrictions.  And, owners would retain remedies for mishandling or improper escheatment. 

Senator Warren’s NAUPA Inquiry 

Senator Warren’s letter to NAUPA provides the evidentiary foundation that underscores the need for reform. The inquiry highlights three trends that directly align with the SAFER Act’s policy objectives: 

1. The Growing State Holdings: While states returned $4.49 billion to rightful owners in 2024, they collectively hold approximately $70 billion in unclaimed property. This is up dramatically from an estimated $20 billion in 2002. Just four states now hold over $34 billion in unclaimed funds. These figures suggest that escheatment has become a significant revenue source for states, raising questions about incentive structures. 
2. The Dormancy Period Squeeze: Between 2004 and 2020, 17 jurisdictions shortened their dormancy periods for banking properties, with many moving from five years to three. This reduction in the time it takes for properties also brings into question the states’ incentives 
3. The “Inactivity” Standard Shift: States are increasingly replacing “Returned by Post Office” (RPO) triggers with “inactivity” standards. Under inactivity rules, the dormancy clock starts simply because an account holder hasn’t initiated contact, even if mail is being successfully delivered. This creates particular problems for long-term investors following buy-and-hold strategies, precisely the constituency the SAFER Act seeks to protect. 

NAUPA was given a response date of May 1, 2026 to respond to eight detailed information requests covering: 

• State-by-state dormancy trigger methods and correlation with escheatment volume 
• Current dormancy periods and recent shortenings
• Ten-year trends in state escheatment reserves and return rates
• Reunification processes and success rates
• The role of contract auditors and compensation structures
• State motivations for adopting inactivity standards and shortening dormancy periods

If NAUPA provides the requested data, the industry would have unprecedented visibility into state escheatment practices and could supply the foundation for congressional hearings, GAO investigations, or amendments to the SAFER Act as it moves through the legislative process. 

Investor Protection as Common Thread 

Both initiatives focus on the same core problem: state escheatment practices that conflict with prudent investment behavior. Senator Warren’s letter explicitly notes the escheatment risk under inactivity standards that “buy and hold” strategies now carry. Long-term investors who aren’t actively logging into accounts may find their securities escheated and liquidated by states, permanently losing any capital appreciation even if they eventually reclaim the funds. 

The SAFER Act addresses this by requiring death confirmation before individual accounts can escheat, effectively protecting living investors who simply haven’t contacted their institution. Warren’s letter cites recent class action lawsuits in Ohio, Colorado, and Delaware that allege improper seizure of stocks, inadequate notification, and failure to account for appreciation as a result of liquidation practices, all problems the SAFER Act’s custody restrictions aim to prevent. 

Looking Ahead 

The convergence of Senator Warren’s oversight letter and the SAFER Act mark a potential turning point in the federal-state balance on unclaimed property. For decades, escheatment has been almost exclusively a matter of state law. These initiatives suggest Congress may be ready to assert federal authority over investment assets, prioritizing investor protection over state revenue interests. 

While we cannot assume Senator Warren’s specific motivations, the alignment between her inquiry and the SAFER Act is unmistakable. Both address the same investor protection concerns, target the same state practices, and emerge at a moment when unclaimed property has become a multi-billion dollar issue affecting retirement savers nationwide. 

The coming months will reveal whether these federal actions result in reshaping the unclaimed property landscape. For now, holders should prepare for potential changes while maintaining full compliance with current state requirements.