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Recent economic activity has generated questions about trust accounts including FDIC limits and bank safety. While the issues are not related only to IOLTA accounts, the Foundation offers the following information as a resource for attorneys. November 2009 The FDIC published its final rule, amending the Temporary Liquidity Guarantee Program (TLGP) and extending the Transaction Account Guarantee Program (TAG) for six months, until June 30, 2010. Under the final Rule, funds in IOLTA accounts will continue to be fully guaranteed by the FDIC, without limit, for participating financial institutions. Institutions will have the option to opt-out of the extended TAG coverage, and as in the initial Rule, are required to prominently display their status as either participating or not participating. Additionally, the FDIC has increased the assessment for participating institutions from 10 basis points, to a sliding scale of 15, 20, or 25 basis points, based on the institution's assigned risk category. Institutions had until November 2 to opt out of the extended TAG program, which will begin on January 1, 2010. IOLTA funds held in institutions that opt out of the extended TAG program (or that opted out of the initial TAG) will be insured up to $250,000 per owner (i.e. client) until December 31, 2013. The FDIC maintains a list of institutions that opted out of the TAG coverage at: http://www.fdic.gov/regulations/resources/TLGP/optout.html. The link to the final rule may be viewed at http://www.fdic.gov/news/board/aug26no4.pdf.
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