II 

113TH CONGRESS 

2D SESSION S. 2699 

To require the National Credit Union Administration to provide pass-through 

share insurance for the deposits or shares of any interest on lawyers 

trust accounts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 30, 2014 

Mr. KING (for himself and Mr. WARNER) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

To require the National Credit Union Administration to provide pass-through share insurance for the deposits or 

shares of any interest on lawyers trust accounts, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. INSURANCE OF AMOUNTS HELD ON BEHALF OF 

4 OTHERS. 

5 Section 207(k) of the Federal Credit Union Act (12 

6 U.S.C. 1787(k)) is amended— 

7 (1) in paragraph (1)(A)— 


rfrederick on DSK6VPTVN1PROD with BILLS
2 

•S 2699 IS

1 (A) by inserting after ‘‘payable to any 

2 member’’ the following: ‘‘, or to any person with 

3 funds lawfully held in a member account,’’; and 

4 (B) by striking ‘‘and paragraphs (5) and 

5 (6)’’; 

6 (2) in paragraph (2)(A), by striking ‘‘(as deter7 mined under paragraph (5))’’; 

8 (3) by redesignating paragraph (5) as para9 graph (6); and 

10 (4) by inserting after paragraph (4) the fol11 lowing: 

12 ‘‘(5) COVERAGE FOR INTEREST ON LAWYERS

13 TRUST ACCOUNTS AND OTHER SIMILAR ESCROW AC14 COUNTS.— 

15 ‘‘(A) PASS-THROUGH INSURANCE.—The 

16 Administration shall provide pass-through share 

17 insurance for the deposits or shares of any in18 terest on lawyers trust account (commonly re19 ferred to as ‘IOLTA’) or other similar escrow 

20 accounts. 

21 ‘‘(B) TREATMENT OF IOLTAS.— 

22 ‘‘(i) TREATMENT AS ESCROW AC23 COUNTS.—For share insurance purposes, 

24 IOLTAs are treated as escrow accounts. 


rfrederick on DSK6VPTVN1PROD with BILLS
3 

•S 2699 IS

1 ‘‘(ii) TREATMENT AS MEMBER AC2 COUNTS.—IOLTAs and other similar es3 crow accounts are considered member ac4 counts for purposes of paragraph (1), if 

5 the attorney administering the IOLTA or 

6 the escrow agent administering the escrow 

7 account is a member of the insured credit 

8 union in which the funds are held. 

9 ‘‘(C) DEFINITIONS.—For purposes of this 

10 paragraph: 

11 ‘‘(i) INTEREST ON LAWYERS TRUST

12 ACCOUNT.—The terms ‘interest on lawyers 

13 trust account’ or ‘IOLTA’ mean a system 

14 in which lawyers place certain client funds 

15 in interest-bearing or dividend-bearing ac16 counts, with the interest or dividends then 

17 used to fund programs such as legal serv18 ice organizations who provide services to 

19 clients in need. 

20 ‘‘(ii) PASS-THROUGH SHARE INSUR21 ANCE.—The term ‘pass-through share in22 surance’ means, with respect to IOLTAs 

23 and other similar escrow accounts, insur24 ance coverage based on the interest of each 

25 person on whose behalf funds are held in 


rfrederick on DSK6VPTVN1PROD with BILLS
4 

•S 2699 IS

1 such accounts by the attorney admin2 istering the IOLTA or the escrow agent 

3 administering a similar escrow account, in 

4 accordance with regulations issued by the 

5 Administration. 

6 ‘‘(D) RULE OF CONSTRUCTION.—No provi7 sion of this paragraph shall be construed as au8 thorizing an insured credit union to accept the 

9 deposits of an IOLTA or similar escrow account 

10 in an amount greater than such credit union is 

11 authorized to accept under any other provision 

12 of Federal or State law.’’. 

Æ 


rfrederick on DSK6VPTVN1PROD with BILLS