Marcia Coyle of the National Law Journal reports:
The Federal Deposit Insurance Corp. has announced that, effective immediately, client funds deposited in Interest on Lawyer Trust Accounts -- regardless of amount -- are eligible for full deposit insurance coverage under the Temporary Liquidity Guarantee Program through Dec. 31, 2009.
The American Bar Association, state and federal lawmakers, community and consumer groups, law firms and individual lawyers had mounted a nationwide campaign to persuade the FDIC to include IOLTA funds in the expanded insurance program. . . . .
ABA President H. Thomas Wells Jr. said that if the FDIC had failed to expand full coverage for IOLTA, lawyers would have had to consider abandoning IOLTA for fully insured, noninterest-bearing accounts or moving IOLTA funds from community banks to the larger "too big to fail" banks. "Abandoning IOLTA would have been catastrophic for IOLTA programs in all 50 states, which provide funding for legal aid for the poor," said Wells. "Moving the accounts to larger banks would have defeated the FDIC's purpose in creating the TLGP."
See the full story here.
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