[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2699 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2699

  To require the National Credit Union Administration to provide pass-
 through share insurance for the deposits or shares of any interest on 
            lawyers trust accounts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 30, 2014

 Mr. King (for himself and Mr. Warner) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To require the National Credit Union Administration to provide pass-
 through share insurance for the deposits or shares of any interest on 
            lawyers trust accounts, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. INSURANCE OF AMOUNTS HELD ON BEHALF OF OTHERS.

    Section 207(k) of the Federal Credit Union Act (12 U.S.C. 1787(k)) 
is amended--
            (1) in paragraph (1)(A)--
                    (A) by inserting after ``payable to any member'' 
                the following: ``, or to any person with funds lawfully 
                held in a member account,''; and
                    (B) by striking ``and paragraphs (5) and (6)'';
            (2) in paragraph (2)(A), by striking ``(as determined under 
        paragraph (5))'';
            (3) by redesignating paragraph (5) as paragraph (6); and
            (4) by inserting after paragraph (4) the following:
            ``(5) Coverage for interest on lawyers trust accounts and 
        other similar escrow accounts.--
                    ``(A) Pass-through insurance.--The Administration 
                shall provide pass-through share insurance for the 
                deposits or shares of any interest on lawyers trust 
                account (commonly referred to as `IOLTA') or other 
                similar escrow accounts.
                    ``(B) Treatment of ioltas.--
                            ``(i) Treatment as escrow accounts.--For 
                        share insurance purposes, IOLTAs are treated as 
                        escrow accounts.
                            ``(ii) Treatment as member accounts.--
                        IOLTAs and other similar escrow accounts are 
                        considered member accounts for purposes of 
                        paragraph (1), if the attorney administering 
                        the IOLTA or the escrow agent administering the 
                        escrow account is a member of the insured 
                        credit union in which the funds are held.
                    ``(C) Definitions.--For purposes of this paragraph:
                            ``(i) Interest on lawyers trust account.--
                        The terms `interest on lawyers trust account' 
                        or `IOLTA' mean a system in which lawyers place 
                        certain client funds in interest-bearing or 
                        dividend-bearing accounts, with the interest or 
                        dividends then used to fund programs such as 
                        legal service organizations who provide 
                        services to clients in need.
                            ``(ii) Pass-through share insurance.--The 
                        term `pass-through share insurance' means, with 
                        respect to IOLTAs and other similar escrow 
                        accounts, insurance coverage based on the 
                        interest of each person on whose behalf funds 
                        are held in such accounts by the attorney 
                        administering the IOLTA or the escrow agent 
                        administering a similar escrow account, in 
                        accordance with regulations issued by the 
                        Administration.
                    ``(D) Rule of construction.--No provision of this 
                paragraph shall be construed as authorizing an insured 
                credit union to accept the deposits of an IOLTA or 
                similar escrow account in an amount greater than such 
                credit union is authorized to accept under any other 
                provision of Federal or State law.''.
                                 <all>