This story appeared in Bank Digest.
The Federal Deposit Insurance Corp has approved a final rule to include Interest on Lawyer Trust Accounts (IOLTAs) in the temporary unlimited deposit coverage for noninterest-bearing transaction accounts.
The Dodd-Frank Wall Street Reform and Consumer Protection Act provides temporary, unlimited deposit insurance for all noninterest-bearing transaction accounts. The FDIC's final rule implements the Dec. 29, 2010, amendment to the Dodd-Frank Act by including IOLTAs within the definition of a “noninterest-bearing transaction account,” the agency said.
According to the FDIC, all funds held in IOLTA accounts, together with all other noninterest-bearing transaction account deposits, are fully insured, without limit, from Dec. 31, 2010, through Dec. 31, 2012. This coverage is separate from, and in addition to, the coverage provided to depositors for other accounts at an insured depository institution.