On November 30th the United States House of Representatives acted swiftly by
passing H.R. 6398, "An Act to require the Federal Deposit Insurance Corporation
to fully insure Interest on Lawyers Trust Accounts." The BBA
advocated for this critical piece of legislation that addresses a gap in the
inclusion of Interest on Lawyers Trust Accounts (IOLTA) in the unlimited FDIC
insurance coverage provided to certain accounts in the Dodd-Frank Wall Street
Reform and Consumer Protection Act which was set to expire on January 1,
2011.
As interest rates have fallen, funding for civil legal services has plummeted
because of the decline in revenue earned on IOLTA accounts. A failure to
include IOLTA in the unlimited FDIC insurance coverage would have been
catastrophic for legal services organizations and their clients. This
comes at a time when more and more people are in need of civil legal
services. In Massachusetts alone, the number of people eligible for legal
assistance grew by 91,000 from FY07 to FY09, and today stands at more than
966,000 people.
The BBA applauds Congressman Barney Frank for his continued leadership and
the entire Massachusetts Congressional delegation for their work on this
critical issue.