The FDIC issued a final rule on January 18 that extends the temporary, unlimited deposit insurance coverage to Interest on Lawyer Trust Accounts (IOLTAs). The final rule implements the December 29, 2010 amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act to include IOLTAs within the definition of a “noninterest-bearing transaction account” for purposes of the temporary, unlimited coverage afforded to such accounts.
Notes: The final rule requires that by no later than February 28, 2011, each insured depository institution that offers noninterest-bearing transaction accounts must prominently post an amended notice in its office lobbies and on its web sites. The notice must explain that IOLTAs will be fully insured through December 31, 2012. Institutions should ensure that their year-end 2010 regulatory reports incorporate the amended treatment of IOLTAs.