Increasing Equality between Credit Unions and Banks through Greater Protections for IOLTAs (H.R. 3468)

What is H.R. 3468?

(Updated July 18, 2017)

This bill was enacted on December 18, 2014

Relieves credit unions of some regulatory burden by expanding federal deposit insurance to include Interest on Lawyer Trust Accounts (IOLTAs) and similar escrow accounts housed within credit unions. Interest On Lawyer Trust Accounts are a type of pooled, interest-bearing account set up by lawyers who handle very small or short-term client funds that cannot earn net interest on their own. These accounts are often used to increase access to legal services for the poor. 

Argument in favor

Greater insurance for funds commonly used to increase access to legal justice for the poor. Advances parity between credit unions and banks.

Argument opposed

Federal credit unions already have their own insurance fund. Credit unions are intrinsically different than banks.

Impact

If enacted, the bill would provide greater regulatory relief to credit unions and greater insurance to IOLTA funds, in addition to increasing party between banks and credit unions.

Cost of H.R. 3468

Enacting this legislation would increase the cost to the government of resolving some future credit union failures; CBO estimates those costs would be minimal and would generally be offset by other collections, resulting in no significant net impact on direct spending over the next 10 years.

Additional Info

Media:

IOLTA Site 

Rep. Ed Royce (R-CA) Response to House Passage