WASHINGTON—Congress has passed a piece of credit union-backed legislation.
The Senate approved H.R. 3468, the “Credit Union Share Insurance Fund Parity Act,” which addresses interest on Lawyer Trust Accounts (known as IOLTA). The House-passed bill was approved in the Senate by unanimous consent.
“We applaud the Senate for passing such critical legislation for credit unions. We thank the bill’s House sponsors, Reps. Ed Perlmutter (D-CO) and Ed Royce (R-CA), as well as Sens. Angus King (I-ME) and Mark Warner (D-VA) for introducing a similar bill in the Senate,” said NAFCU’s Brad Thaler. “Parity for credit unions on Interest on Lawyer Trust Accounts is a key element of NAFCU’s five point plan for regulatory relief for credit unions.”
The legislation would direct the National Credit Union Administration to issue a regulation extending share insurance to owners of the funds held in trust accounts opened and managed by credit union members. To date NCUA has interpreted that the Federal Credit Union Act does not support such parity treatment for these accounts.
“The inability of federally insured credit unions to extend share insurance coverage to IOLTAs and prepaid debit card master accounts forces 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,” said CUNA in a statement.
H.R. 3468 is designed to give credit unions parity with FDIC-insured institutions when it comes to escrow accounts such as IOLTAs. The bill awaits the president’s signature.
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