FDIC Federal Register Citations

From: Eliot Field
Sent: Wednesday, November 12, 2008 9:18 AM
To: Comments
Subject: Comment -- RIN # 3064–AD37 

Folks,

Like most lawyers in Maine, I have an IOLTA (Interest on Lawyers' Trust Accounts), which is my trust account to hold my clients' funds while they are awaiting disbursement.  It is an non-interest bearing account, at least for me and my clients, but there is interest earned and paid on this account, and it goes primarily to the Maine Bar Foundation to help fund areas of significant need in the legal world of the state of Maine.  This arrangement provides great value to those in need of legal services in Maine.

I often have well over $250,000 sitting in the account, as funds are deposited and paid out, so I was very distressed to hear that, under new rules, the FDIC would not cover more than $250,000.  Yet, I understand that so-called "transaction accounts" (for payroll, etc.) are fully covered.  IOLTA accounts should be fully covered as well.  Please change the rule so such accounts are fully covered.

A recent experience gives one small example.  I am holding $560,000 in my trust account for one client, and because of the financial crisis, she was concerned that the bank might fail, so we moved $500,000 out of the account and into another type of account that was protected and would earn her a bit of interest.  If I had to do this type of transaction for every client when my account's funds were over $250,000, it would be an administrative nightmare.

Thank you for your consideration.

Eliot Field