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CUNA will pursue lawyers account coverage issue
WASHINGTON (10/28/08)—The Credit Union National Association (CUNA) said Monday it will follow up with the National Credit Union Administration (NCUA) on its recent opinion letter on insurance coverage on Interest on Lawyers' Trust Accounts (IOLTA). The accounts in question are those set up by lawyers at a credit union or bank to hold funds for their clients. Often, the interest accrued is paid to the state or the state bar association to fund legal services for those who cannot afford them. In response to an inquiry by the Wisconsin Office of Lawyer Regulation, the NCUA stated its opinion that all clients who have funds represented in an IOLTA must be members of the credit union holding the account. The exception to this, according to the agency, would be accounts deposited in a low-income credit union, which can accept nonmember funds. Those accounts would provide share insurance coverage for all the clients. CUNA Deputy General Counsel Mary Dunn said Monday that this situation puts credit unions at a disadvantage to attract this type of account if all the clients must be members, rather than just the attorney establishing the account. Dunn said that CUNA has discussed this issue with the agency and will continue to pursue further discussions. Use the resource link below to read the NCUA letter.
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