ALEXANDRIA, Va. — NCUA is applauding a recent decision from the Washington State Supreme Court allowing credit unions to remain on the list of financial institutions where attorneys can keep interest on lawyer's trust accounts or IOLTAs.

In 2003, the Washington State Bar Association conducted a review of the Washington Rules of Professional Conduct and recommended an amendment that CUs be removed from the list because there was only a small number of them on the list and that NCUA would not insure accounts that held nonmember funds even though the trust accounts belonged to a CU member, for example, the attorney.

"NCUA believes the Washington State Supreme Court made the right decision in its review of the state bar association rules when it rejected a proposal to remove credit unions from the types of financial institutions where attorneys can set up IOLTA accounts," said John McKechnie, NCUA director of public and congressional affairs. "Nothing in the Federal Credit Union Act or NCUA's rules prohibit this type of account at credit unions, although membership requirements for account insurance coverage limits coverage. Attorneys can set up IOLTA accounts at credit unions and account insurance will be available for client funds in these accounts as long as the clients are members of the credit union."