WASHINGTON (12/12/14)--The U.S. Senate passed the Credit Union Share Insurance Fund Parity Act Thursday. The bill directs the National Credit Union Administration to extend share insurance coverage to trust accounts, such as Interest on Lawyer Trust Accounts (IOLTA) and other similar accounts, opened and managed by credit union members.
The Credit Union National Association, an early and prominent supporter of the IOLTA bill, immediately sent a letter to President Barack Obama urging him to sign the bill into law.
The insurance-parity bill is the second CUNA-supported regulatory relief bill to pass recently. Last week, the House voted a resounding 422-0 in favor of The Regulation D Study Act.
The Senate's approval by unanimous consent Thursday of the IOLTA bill brings parity treatment for credit unions in relation to banks.
"This parity bill would provide credit unions the same opportunity as other financial institutions to serve their members and the community," CUNA President/CEO Jim Nussle said upon the bill's passage. He noted that CUNA is proud to have actively supported IOLTA's passage in both the House and the Senate.
CUNA believes the legislation is needed because the National Credit Union Administration has interpreted that the Federal Credit Union Act does not permit it to extend share insurance coverage to trust accounts.
"CUNA thanks Sens. Angus King (I-Maine) and Mark Warner (D-Va.) and Reps. Ed Royce (R-Calif.) and Ed Perlmutter (D-Colo.) for standing with credit unions to bring parity to the not-for-profit cooperatives, their members, and the communities they serve," Nussle said.
The House passed its version of the legislation (H.R. 3468) in May. The bill now will be sent to the president to be signed into law.
The relief bill passed last week--the Reg D Study Act--would direct the U.S. Government Accountability Office to conduct a study of the impact of the Federal Reserve rules that set monetary reserve requirements at depository institutions.
The rules affect credit union members by limiting the number of automatic withdrawals from a member's savings account to six transactions per month, which can unnecessarily cause credit union members to overdraft their checking accounts after the limit of six automatic transfers has been reached.