WASHINGTON (11/14/13, UPDATED: 10:55 A.M. ET)--The House Financial Services Committee has just approved 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. The bill, known as the Credit Union Share Insurance Fund Parity Act (H.R. 3468), was approved by voice vote.
Credit Union National Association President/CEO Bill Cheney this week thanked committee chairman, Rep. Jeb Hensarling (R-Texas) and ranking Democrat Rep. Maxine Waters (Calif.) for their support of the measure. "We hope that H.R. 3468 is the first of many regulatory relief bills to move through this committee," Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan said following the vote.
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.
CUNA supports the bill, which would 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.