State governments can effectively promote domestic entrepreneurship in low-income communities and simultaneously fulfill their duties as conservator s of unclaimed property, by lending unclai med financial assets-in-trust at preferential interest rates to in-state microfinance providers. This plan presents an alternative to charitable contributions, though it does not resolve the tension between for-profit and not-for-profit microfinance providers. Such a scheme could be a significant funding source for many microfinance operations in the United States today. Even a small portion of the yearly intake of unclaimed assets would be substantial enough to support fully most microfinance loan portfolios. Also, reinvestment of unclaimed financial assets into the consumer financial system, rather than fiscal redeployment or traditional public fund investment, correctly counterbalances the contraction in consumer credit supply that occurs when these assets leave the balance sheets of financial institutions. Implementation of such a scheme may be accomplished by minor changes to current unclaimed property law.
Andrew W. Hartlage,
Unclaimed Financial Assets and the Promotion of Microfinance,
Mich. L. Rev. First Impressions
Available at: http://repository.law.umich.edu/mlr_fi/vol109/iss1/12