Maine's legislature is one step closer this week to passing the state's new law protecting personal financial records that are abandoned in self-storage units. The bill, LD 1499, is under final review by the Business Research Economic Development Committee. It was drafted by the Maine Self Storage Association together with the Bureau of Consumer Credit Protection, and is expected to pass in both Maine's House and Senate this spring. The bill was sponsored by Maine State Senator Peter Bowman.
Under Maine's current law, items in self-storage units may be sold if rent for the unit is 45 days or more past due. The self-storage operator is not required to inventory the unit for personal records, or to notify any regulators if personal records are found or believed to be present, as often happens when mortgage companies that keep their records in self-storage go out of business.
Last spring, a mortgage company storing its records at Mini Self Storage in Scarborough, Maine, did go out of business -- like dozens of other mortgage companies in Maine since the recession began -- and abandoned its unit. Mini Self Storage attempted to auction 60 boxes of financial records that were inside the unit, but was prevented from doing so when the Maine Bureau of Consumer Credit Protection obtained a court order allowing it to confiscate the records. Shortly afterward, Janet Hanscom, the manager of Acorn Self Storage in Westbrook, Maine, also contacted the Bureau of Consumer Credit Protection to ask what she should do with records abandoned at her facility. Four mortgage companies that stored records at her unit had gone bankrupt, and one of them had abandoned large amounts of financial records. "It is unconscionable," Hanscom told a Portland Press Herald reporter at the time. She is now working with the bureau to properly store the records in case they are later claimed.
In reaction to the Mini Self Storage incident, Maine's legislature introduced the Act to Protect Confidential Consumer Records in Self Storage last spring. The act would have required self-storage operators to open abandoned units, pull all the contents out, and make a thorough search for personal information, mortgage papers, or accounting records before auctioning the unit. But the Maine Self Storage Association opposed the bill, saying it would place too great a burden on self-storage owners and operators, and it agreed to help draft a new bill, surveying its members for ideas and working with the Bureau of Consumer Credit Protection. LD 1499 is the result.
LD 1499 provides for self-storage operators to inspect the contents of an abandoned unit if he or she has reason to believe that personal information is inside. If so, the personal information may not be auctioned, and may instead be destroyed. Self-storage operators may also inspect units for personal information even without a reasonable belief that they contain such records, but the new law will place operators under no obligation to do such an inspection. Instead, people who purchase unit contents at self-storage auctions will have to sign a contract agreeing to return any personal information that they might find. Self-storage rental agreements, too, will change -- rental agreements will include a query as to whether the prospective tenant expects to be storing personal information such as Social Security numbers, credit or debit cards, bank account numbers, or passport information.