NCUA Board Chairman Debbie Matz said the Credit Union Share Insurance Fund Parity Act signed by President Obama would enhance public confidence in the credit union system. As a result of the new law, IOLTA accounts are now covered by federal deposit insurance, Matz added.
“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,” Matz said. “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.”
Matz thanked Obama for signing the bill into law, and also thanked Rep. Ed Royce (R-Calif.) and Rep. Ed Perlmutter (D-Colo.) for their work on the legislation in the House.
“Sen. Angus King (I-Maine) and Sen. Mark Warner (D-Va.) played important roles moving this through the Senate. I am also pleased Congress adopted NCUA's recommendations regarding this legislation,” she said.
The NCUA said credit unions were at a competitive disadvantage before the legislation was signed.
“Credit unions were not able to offer the same level of insurance for these accounts as banks; because not all clients of a lawyer were members of the credit union that held the trust account,” an NCUA press release said.
Matz said the agency plans to make the necessary modifications to its regulations to fully comply with the new law.
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