WASHINGTON President Barack Obama signed the Credit Union Share Insurance Fund Parity Act into law last Thursday.
The legislation, originally introduced by U.S. Representative Ed Royce (R-CA) last November, passed the U.S. House of Representatives unanimously in May, and the Senate on Dec. 11. It expands federal deposit insurance to include Interest on Lawyer Trust Accounts (IOLTAs) and similar escrow accounts housed within credit unions.
Specifically, the bill amends the Federal CU Act to require pass-through share insurance coverage be provided when a credit union member holds funds on behalf of a nonmember in an IOLTA or other similar account.
Both CUNA and NAFCU hailed the move.
"CUNA thanks President Obama for signing this important piece of legislation into law," Jim Nussle, CUNA's president and CEO, said in a release. "Each time the government removes barriers that hinder the operations for the nation's credit unions it is a victory for Americans. Credit unions can better serve their members through their consistently superior service and lower fees and better rates, when not encumbered by unnecessary constraints that do nothing to maintain credit unions' stellar safety and soundness record."
"This is a big victory for the credit union industry, and we thank President Obama for his action on this matter," said Dan Berger, president and CEO of NAFCU. "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."