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December 10, 2015

Final IOLTA rule scheduled Dec. 17

The NCUA Board expects to finalize its proposed rule for implementing last year's Federal Credit Union Act revisions ensuring parity in coverage of Interest on Lawyer Trust Accounts and "other similar escrow" accounts during its Dec. 17 open meeting.

The revisions were made through the NAFCU-supported "Credit Union Share Insurance Fund Parity Act." It directs NCUA to provide enhanced, pass-through share insurance for IOLTAs and other similar escrows.

NAFCU commented on the proposal in July, thanking the agency for its move to incorporate the "Credit Union Share Insurance Fund Parity Act" into its rules and regulations, but said NCUA should adopt a less rigid definition of "other similar escrow" accounts. NAFCU recommended that NCUA consider including accounts that exhibit a relationship of trust and confidence for the benefit of another, though it may not rise to the requisite level of a fiduciary relationship.

In December 2014, NCUA Chairman Debbie Matz announced that lawyers' trust accounts at federally insured credit unions are now insured to the limit allowed by the National Credit Union Share Insurance Fund. This final rule will bring NCUA's regulation into conformity with her announcement and will address the "other similar escrow" accounts provision in the law.

NCUA released the open meeting agenda yesterday. Also on the Dec. 17 agenda is a request for comments in round four of the agency's regulatory review under the Economic Growth and Regulatory Paperwork Reduction Act.

The meeting begins at 10 a.m. Eastern at agency headquarters in Alexandria, Va.