A recent bill introduced in the US House of Representatives, the "Safeguarding Americans' Fairly Earned Retirement Act of 2026" (H.R. 8338¹ or the Bill), would establish conditions under which certain securities, digital assets or investment accounts (i.e., covered assets²) held by a financial institution may be escheated under state unclaimed property laws.

The introduction of H.R. 8338, one day after Senator Elizabeth Warren sent an oversight letter to the National Association of Unclaimed Property Administrators (NAUPA) seeking insights into recent trends in state unclaimed property laws, suggests the potential for coordinated federal oversight and regulation of state escheatment law. Both H.R. 8338 and Senator Warren's letter allude to Takings Clause and Due Process Clause claims that have been considered by federal courts in recent and ongoing litigation.

Proposed federal legislation — H.R. 8338

H.R. 8338 was introduced in the House of Representatives with a stated purpose of "prevent[ing] the premature seizure of an individual's securities, digital assets, or investment accounts in the custody of a financial institution under State escheatment laws … "

Under the Bill, a financial institution³ would be prohibited from yielding any of the following to a state:

• Custody of a covered asset
• Any proceeds from the sale of covered asset

Or

• A payment related to the covered asset (e.g., dividends, principal payment), pursuant to state unclaimed property laws, regulations or administrative provisions or other means of escheatment (collectively, unclaimed property law), unless certain conditions are satisfied

In the case of a covered asset directly held or beneficially owned by an individual, the Bill outlines the following conditions to be met before escheatment:

• Confirmation of the owner's death at least three years before yielding custody
• No expression of interest in the assets, proceeds or payments by a fiduciary representing the estate for at least three years before yielding custody
• Where another individual holds an ownership interest in the asset, confirmation of that other individual's death.

A financial institution's obligations would differ under the proposed framework based on the ownership of the covered assets.

Covered assets held or owned by an entity would be considered inactive only if the financial institution has no recorded contact with a representative for at least five years.

For assets held by individuals who have reached retirement age, the financial institution would be required — after five years from last contact, and every five years thereafter — to compare its records against state or federal death databases to determine whether the owner is deceased. This periodic death-database comparison requirement would not on its own authorize escheatment, but instead inform on whether the statutory death-confirmation prerequisites may eventually be satisfied.

In summary, the Bill would establish a federal standard that preempts state unclaimed property laws to the extent those laws would require remittance of covered assets in a manner inconsistent with the Bill's requirements.

HR 8338 has been referred to the House Committee on Financial Services and remains in the early stages of the legislative process.

Request for information pertaining to state dormancy standards, escheatment trends and oversight practices

In an oversight letter sent to NAUPA one day prior to HR 8338's introduction, Senator Warren requested information on recent state law trends on how Americans' can access their unclaimed property, noting that "states hold significant reserves of unclaimed property, relative to that reclaimed by property owners." Those trends include the increased adoption of an "inactivity" standard (i.e., even if mail is delivered, a state can escheat funds if the account holder has not made contact with the company holding the account) instead of a "Returned by Post Office" standard (i.e., dormancy period calculations begin when the mail is returned as undelivered) for triggering dormancy period calculations, and shortening dormancy periods from five years to three years. Senator Warren also noted that property owners are increasingly suing states to access unclaimed funds, citing examples of recent litigation in Ohio, Colorado and Delaware.⁴

Those trends and lawsuits "raise significant concerns about whether states have appropriate incentives and procedures in place to reunite unclaimed property with its rightful owners," Senator Warren said. In an effort to determine whether investor protection standards are being upheld as states change their escheat process, the Senator requested certain information from NAUPA, including, but not limited to:

• A summary of the method each state uses to trigger the dormancy period for financial accounts, with specific information required for an "inactivity" standard
• Each state's dormancy period for financial accounts and whether the period was shortened in the past 10 years and if so, providing the new dormancy period
• A state-by-state breakdown of the increase in state unclaimed property reserves over the last 10 years
• The total number (assumedly value) of unclaimed property held by states
• An overview of the role of auditors in the escheatment process
• Insight into why states are changing their dormancy laws

Senator Warren requested a response from NAUPA by May 1, 2026; however, as of the date of this Tax Alert, it does not appear that NAUPA has issued a public response to the request.

Litigation in the federal courts surrounding escheat practices related to financial assets

A notable case that appears to have been alluded to in Senator Warren's letter to NAUPA is Vial v. Mayrack⁵, which began on December 4, 2024, when Plaintiff Jaime Vial filed a 42 U.S.C. 1983 action challenging the constitutionality of Delaware's Unclaimed Property Law (DUPL). Vial alleges that Delaware officials improperly escheated and liquidated securities without adequate notice or just compensation, in violation of the Fifth and Fourteenth Amendments. Although Delaware later returned approximately $2.6 million, Vial argued that the true value of the property was substantially higher — by approximately $11 million.

The court rejected Delaware's motion to dismiss Vial's amended complaint on the grounds of lack of standing, failure to state a claim, statute-of-limitations defenses, and Eleventh Amendment immunity, finding Vial had adequately shown real financial harm, raised legitimate concerns about notice and fairness, and brought his claims within the allowable time period. Importantly, the court agreed that Vial's claims could not have fully arisen until Delaware issued its final compensation determination in early 2023.

In a March 23, 2026, ruling, the court denied Delaware's motion to dismiss in full but noted unresolved questions regarding the operation of Delaware's Escheat Special Fund, from which Vial seeks recovery. To address those questions, the court ordered expedited fact-finding focused on how the fund is financed and administered, keeping the case moving forward on the merits.

Implications

Holders operating in this sector, offering the covered asset types, should closely monitor HR 8338 as it moves through the legislative process. The timing of the NAUPA inquiry and additional litigation focused on shareholder and owner protection from premature takings of assets that are typically intended and designed to be held by the owner for long periods of time, could bolster the likelihood of the Act advancing to the Senate.

EY will continue to monitor this development and issue additional Tax Alerts as warranted.