WASHINGTON – President Obama has signed H.R.3468, the Credit Union Share Insurance Fund Parity Act (IOLTA), into law. H.R. 3468 directs NCUA to issue a regulation extending share insurance to owners of the funds held in trust accounts opened and managed by credit union members.
Both credit union trade groups had sought the legislation because NCUA has interpreted that the Federal Credit Union Act does not support such parity treatment for these accounts. The resulting inability of federally insured credit unions to extend share insurance coverage to IOLTAs and prepaid debit card master accounts has forced credit union members to use a bank or thrift in order to receive the maximum deposit insurance coverage for all owners of the funds held in such an account, the trade groups had argued.
"CUNA thanks President Obama for signing this important piece of legislation into law,” said CUNA CEO Jim Nussle in a statement. “Each time the government removes barriers that hinder the operations for the nation's credit unions it is a victory for Americans. Credit unions can better serve their members, through their consistently superior service and lower fees and better rates, when not encumbered by unnecessary constraints that do nothing to maintain credit unions' stellar safety and soundness record."
Similarly, NAFCU CEO Dan Berger also praised the passage.
“This is a big victory for the credit union industry, and we thank President Obama for his action on this matter,” said Berger. “Having parity between the coverage under the National Credit Union Share Insurance Fund and the FDIC on all types of deposits and accounts has been one of our regulatory relief goals for credit unions.”