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