President Signs Royce Credit Union Share Insurance Fund Parity Act

Press Release

Today, President Barack Obama signed the Credit Union Share Insurance Fund Parity Act, H.R. 3468, into law. The legislation, originally introduced by U.S. Representative Ed Royce (R-CA) last November, passed the U.S. House of Representatives unanimously on May 6, 2014, and the U.S. Senate on December 11, 2014.

"The Credit Union Share Insurance Fund Parity Act strengthens national credit unions' commitment to IOLTAs and the legal services they help fund for local communities," said Rep. Royce. "I applaud the President for supporting my efforts to deliver regulatory relief to our nation's credit unions that currently serve over 100 million members."

"I applaud the President for signing this legislation into law because it is critical in ensuring IOLTA's full value in light of any potential credit union failure," ​said U.S. Representative Ed Perlmutter (D-CO), a cosponsor of the legislation. "More importantly, the interest earned on Lawyer Trust Accounts goes to grants improving access to civil justice and legal services for the poor."

The Credit Union Share Insurance Fund Parity Act expands federal deposit insurance to include Interest on Lawyer Trust Accounts (IOLTAs) and similar escrow accounts housed within credit unions.

Unlike FDIC coverage, the current regulatory opinion of the National Credit Union Administration is that funds held by credit union members on behalf of those who are not federally-insured credit union members will not be insured by the National Credit Union Share Insurance Fund. This has created a disparity in coverage when examining IOLTAs.

Specifically, the bill amends the Federal Credit Union Act to require that 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.

Rep. Royce is a senior member of the House Financial Services Committee and has served on the committee since 1995.

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