Each depositor insured to at least $250,000 per insured bank



Home > Regulation & Examinations > Laws & Regulations > FDIC Federal Register Citations




FDIC Federal Register Citations

From: Kathy K. Howard
Sent: Wednesday, November 12, 2008 2:34 PM
To: Comments
Cc: Paul V Carlin; serlichman@mlsc.org; Pamela.Ortiz@courts.state.md.us; MSBA Executive Committee; Sharon Goldsmith; Julie M. Strandlie
Subject: FDIC RIN 3064-AD37
Importance: High

To: The Federal Deposit Insurance Corp.
From: Katherine Kelly Howard, President
      Maryland State Bar Association
Re: FDIC RIN 3064-AD37 
Request For Action regarding IOLTA Accounts

Thank your for your time in addressing this urgent issue. I am the
President of the Maryland State Bar Association which  represents over
23,000 Maryland attorneys and is one of the largest voluntary Bar
Associations in the country.

For many years interest on lawyer trust accounts (IOLTA) has been
Maryland's major source of funds for programs that provide civil legal
services to Maryland citizens who are unable to afford them.

Please be advised that Maryland's attorneys have been working diligently
to assist persons who have been adversely affected by the recent dire
economic downturn. In fact, over 800 Maryland attorneys have volunteered
their time and talents to assist Maryland citizens in dealing with
mortgage foreclosure situations without charge.  IOLTA funds were relied
upon to train these attorneys in new Maryland Foreclosure laws in order
for them to effectively assist these individuals. 

On behalf of the MSBA and all Maryland attorneys I urge the FDIC to
construe IOLTA accounts as non-interest bearing transaction accounts
under TLGP.  Alternatively, the FDIC should grant an 
exception in the TLGP rules explicitly stating that funds in IOLTA
accounts have unlimited deposit insurance coverage regardless of dollar
amounts. 

Without protection of individual lawyer accounts, lawyers may be
inclined to abandon their IOLTA accounts in favor of protected client
accounts rather than risk those funds. This unintended consequence of
the TLGP regulations must be avoided otherwise IOLTA funds such as those
in Maryland will be severely jeopardized which in turn will ultimately
harm those in our society who are most vulnerable in these tumultuous
times. 

The American Bar Association has provided a detailed statement outlining
the need for this decision by the FDIC. I commend its cogent reasoning
to you and urge you to accept the recommendations therein.

Katherine Kelly Howard, President
Maryland State Bar Association

 


Last Updated 11/13/2008 Regs@fdic.gov