Newsroom

December 17, 2014

Obama signs NAFCU-supported IOLTA bill

President Barack Obama, as urged by NAFCU, signed into law H.R. 3468, the "Credit Union Share Insurance Fund Parity Act," ensuring credit unions parity with banks on escrow accounts such as Interest on Lawyer Trust Accounts (IOLTAs). NAFCU has asked NCUA to quickly make any necessary rule clarifications.

"This is a big victory for the credit union industry, and we thank President Obama for his action on this matter," said NAFCU President and CEO Dan 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."

"We thank the bill's House sponsors, Reps. Ed Perlmutter, D-Colo., and Ed Royce, R-Calif., as well as Sens. Angus King, I-Maine, Jon Tester, D-Mont., Deb Fischer, R-Neb., and Mark Warner, D-Va., for introducing a similar bill in the Senate - and Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, for their leadership in advancing this legislation," Berger continued.

In Berger's letter to the president last week, he noted, "Consumers often do not distinguish between the government backing on accounts at financial institutions. It is important that the law dictate that there is no difference in coverage, so as not to favor one type of institution over another in the marketplace."

Writing NCUA General Counsel Mike McKenna, NAFCU Director of Regulatory Affairs Alicia Nealon said it seems clear that credit unions should be able to immediately begin offering accounts such as IOLTAs with share insurance coverage under the new law, but NCUA may need to make conforming changes to its rules. In that event, she urged that NCUA move forward with an interim final rulemaking so credit unions may begin implementing the authority.

The measure will help ensure that federally insured credit unions have parity with FDIC-insured institutions with respect to escrow accounts such as IOLTAs – advancing a key aspect of NAFCU's five-point plan for regulatory relief for credit unions.