WASHINGTON (11/14/13)--Legislation that would extend share insurance coverage to all of the underlying owners of funds held by lawyers in trust accounts and realtors in escrow accounts was introduced late Wednesday.
The bill, supported by the Credit Union National Association, is known as the Credit Union Share Insurance Fund Parity Act (H.R. 3468) and was introduced by Reps. Ed Royce (R-Calif.) and Ed Perlmutter (D-Colo.), as expected (News Now Nov. 12).
Specifically, the bill would provide National Credit Union Share Insurance Fund coverage for accounts such as Interest on Lawyers Trust Accounts (IOLTAs) so they are treated for deposit insurance purposes on the same basis as similar accounts insured by the Federal Deposit Insurance Corporation.
The House Financial Services Committee has scheduled a markup on the bill for today.
CUNA President/CEO Bill Cheney thanked the House Financial Services Committee chairman, Rep. Jeb Hensarling (R-Texas), and its ranking Democrat, Rep. Maxinie Waters (Calif.), for their leadership in bringing this relief measure up for committee action.
Upon the bill's introduction, CUNA sent a letter of support to Hensarling and Waters saying the credit union relief legislation is needed to correct a National Credit Union Administration interpretation of the Federal Credit Union Act that puts credit unions at a disadvantage. The NCUA has said that for full insurance coverage, all the clients must be members, rather than just the attorney establishing the account.
The inability of federally insured credit unions to extend share insurance coverage to IOLTAs and similar escrow accounts means that the accountholder must use a bank or thrift in order to receive the maximum deposit insurance coverage for all owners of the funds held in trust or escrow, the CUNA letter said.
Also to be considered at the Thursday markup is H.R. 3329, a bill introduced by Rep. Blaine Luetkemeyer (R-Mo.) to increase from $500 million to $1 billion the cap on the application of the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors.