A federal judge on Thursday approved a settlement which now requires the state of Illinois to pay interest on unclaimed money it holds to the residents who rightfully own and claim it.
Judge Charles Kocoras approved the settlement agreement reached between the state of Illinois and attorneys for the plaintiffs who filed the lawsuit five years earlier to compel the state to begin paying interest on the unclaimed property in the state's possession.
Since 1961, the Illinois Treasurer's Office has been tasked under state law with holding unclaimed money and property like forgotten stock dividends, rent deposits, abandoned bank accounts, uncashed checks, utility refunds and more. Treasurer Mike Frerichs' office maintains a website on the funds - known as the ICash program - where Illinois residents can search their names to see if they are owed any unclaimed property, as well as submit a claim to obtain it.
The unclaimed funds held by the state currently add up to an estimated $3.5 billion - with many Illinoisans unaware they're owed that money, some now with interest after Thursday's settlement.
The plaintiffs filed the class action lawsuit in 2016, alleging the state was violating the U.S. Constitution by holding private property without "just compensation," asking the court to force the state to pay interest on those funds.
The settlement agreement approved Thursday says the state will now pay that interest based on the current rate of inflation or the monthly earnings rate of the state portfolio, whichever is greater, minus a $5 administrative fee, according to Frerichs' office.
To get the interest payment, Illinois residents aren't required to take any action. Anyone who has previously claimed funds from the ICash program, starting from Aug. 22, 2017, and has a valid mailing address on file with the Treasurer's Office will receive a check in the mail. Anyone who claims their money in the future will receive their funds with that interest included.
The interest begins to accrue either on Aug. 22, 2017, or the date the property was turned over to the Treasurer's Office, whichever is later. And the interest will continue to accrue until the Treasuer’s Office pays the claim, for a maximum of 10 years.
Representatives for the offices of both Frerichs and Illinois Attorney General Kwame Raoul - who represented the state in the legal proceedings - declined multiple requests for an interview to discuss the settlement and how it will impact Illinois residents.
A spokesman for Frerichs - who has repeatedly touted his office's outreach efforts on the ICash program - simply said in a statement that Illinois is now one of four states that pay interest on unclaimed funds.