As a result
of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Board of
Directors of the Federal Deposit Insurance Corporation ("FDIC")
approved (on Tuesday, January 18), a final rule to include Interest on Lawyer
Trust Accounts ("IOLTAs") in the temporary unlimited deposit coverage
for noninterest-bearing transaction accounts.
This rule implements an amendment to the Act instituted on December 29th, 2010 with the inclusion of IOLTAs "within the definition of a 'noninterest-bearing transaction account.'" Any funds within IOLTA (and all other noninterest-bearing transaction account deposits, for that matter) will be fully insured (without limitation) from December 31st of last year through December 31st, 2012.
Per the FDIC, this coverage is "separate from, and in addition to, the coverage provided to depositors for other accounts at an insured depository institution."
Financial institutions SHOULD note that they have until February 28th, 2011 to post the modified notice regarding insured accounts, and are being encouraged to do so ASAP. [FDIC]
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