Chairman Matz’ statement on IOLTA’s proposed rule
Thank you for clarifying that federal share insurance coverage on lawyers’ trust accounts is already in effect, in cases where the administering attorney is a member of a federally insured credit union.
It’s important to further clarify that in those cases, the insurance coverage passes through to everyone who has funds in the account—regardless of whether or not each client is a member.
I also appreciate your effort to provide regulatory certainty around broad categories of other escrow accounts that will receive pass-through insurance coverage.
Requiring every individual escrow account to be evaluated on a case-by-case basis would have created unnecessary burden and uncertainty. Instead, insuring broad categories of escrow accounts will be more efficient for NCUA and for credit unions.
So I support this proposal to add pass-through coverage for realtor escrow accounts and prepaid funeral accounts.
I would also support extending pass-through coverage to other similar escrow accounts where licensed professionals serve in a fiduciary capacity and hold funds to benefit their clients.
I look forward to receiving comments about other categories of escrow accounts that may legally qualify… such as payroll cards or other prepaid card programs.