WASHINGTON — The House Financial Services Committee plans to mark up a bill Thursday that would amend the Federal Credit Union Act to extend share insurance coverage to trust accounts held in the name of nonmembers.
The legislation, which is expected to be introduced by Rep. Ed Royce, R-Calif., would rectify the disparate treatment given such accounts at credit unions, according to the Credit Union National Association. The Financial Services Committee noted in a memorandum last week that this issue is most prevalent with interest on lawyers' trust fund accounts and prepaid debit master accounts.
The National Credit Union Administration issued an opinion letter in 2008 on insurance coverage on interest on lawyers' trust accounts. These are accounts opened by lawyers at credit unions or banks to hold funds for their clients. The interest accrued is usually paid to the state or the state bar association to fund legal services.
That puts credit unions at a disadvantage to attract this type of account, according to CUNA, if all the lawyers' clients must be credit union members, instead of just the lawyer opening the account.
"We hope that the legislation considered on Thursday will be the first of several regulatory relief bills to move through the committee," said CUNA Senior Vice President of Legislative Affairs Ryan Donovan in a statement.
The Financial Services Committee is also expected to markup H.R. 3329, a bill introduced by Rep. Blaine Luetkemeyer, R-Mo., that would raise the cap on the application of the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors to $1 billion from $500 million.
