Q: Is Dormancy or Inactivity Defined in the Wisconsin Statutes?
A: No. The time period when an account becomes dormant or inactive is not defined by law. However, the time period when an account becomes abandoned is defined by law. Thus, the procedure to follow when an account is abandoned can be found within the statutes. How an account should be treated if it is dormant or inactive is a matter that must be considered by the bank’s legal counsel and addressed by contract.
Because dormancy is undefined, the bank is free to set its own definition of dormant and make the determination of how a dormant account is treated, based upon its interpretation of the statute. When an account is abandoned is a matter of law and bank must follow Wis. Stat. Section 177.06 when that definition is met. Thus, dormancy and abandonment are separate matters.
The language in the statute is not clear as to whether a dormancy or inactivity fee can be charged, and the Wisconsin Department of Financial Institutions has not provided further interpretation. Thus, financial institutions will want to work with their legal counsel to determine whether such a fee is permissible.