ALEXANDRIA, Va.—Lawyers’ Trust accounts at federally insured credit unions are now insured to the limit allowed by the National Credit Union Share Insurance Fund, according to NCUA.
The agency made the change following President Obama’s signing of the Credit Union Share Fund Parity Act, also known as IOLTA.
“Credit unions now have parity with banks and, effective immediately, can fully insure lawyers’ trust accounts up to $250,000 for each owner of the funds, which they could not do before,” said NCUA Chairman Debbie Matz in a statement. “An attorney who is a member of the credit union where the trust account is opened now has a choice of financial institutions for that trust account. This enhances public confidence in both the banking and the credit union systems now that federal share and deposit insurance programs administered by NCUA and the FDIC are the same.
Previously, credit unions could not offer the same level of insurance for these accounts as banks, because NCUA had ruled that not all clients of a lawyer were members of the credit union that held the trust account.
Matz said NCUA will make changes to its regulations to fully conform to the Act, but that accounts are fully insurable under the new law.