COLUMBIA, S.C., and RALEIGH, N.C. (2/6/15)--In December, with strong support from CUNA, President Barack Obama signed into law the Credit Union Share Insurance Fund Parity Act, which in effect permits credit unions to offer Interest on Lawyer Trust Accounts (IOLTAs). But before credit unions can offer these and other types of trust accounts, they must navigate the individual state laws that dictate the way the accounts are structured and governed.
Carolinas Credit Union League (CCUL) staff have been working with members of the North Carolina State Bar and the South Carolina Bar Foundation in recent weeks to determine the eligibility requirements for credit unions to offer IOLTAs in each state.
According to CCUL, North Carolina credit unions could be able to offer IOLTAs by late summer or fall, while South Carolina credit unions may have to wait a bit longer (In the Loop Feb. 5).
North Carolina's IOLTA program director informed the league that a rule change was approved this month to include credit unions as eligible institutions.
Following a public comment period, the rule will be considered for adoption at the next council meeting in April, and then sent to the North Carolina Supreme Court in July for final approval. Barring any delays, credit unions will be able to offer IOLTAs in a matter of months.
The South Carolina Bar Foundation, which administers the IOLTA program in South Carolina, will meet in March and take up the issue of changing eligibility requirements.
If the board can amend the requirements by merely changing the definition, the process could be expedited. If a new rule must be proposed entirely, which would require a lengthy comment period, the process could be protracted.
Once the South Carolina Bar Foundation meets in March, the league will be able to provide more clarification on the process.