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December 21, 2010

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Comments

Ken Kapner

Lee Lundy is correct. An IOLTA account is a trust account, and I understand a trust is a separate legal entity subject to its own FDIC limits protections. The only change I foresee is from unlimited coverage back to pre-crisis limits of $100K FDIC protection (unless the protection stays at the increased $250K limits).

Kathie

If this passes, I don't see how state bars can mandate that lawyers keep client trust funds in IOLTA accounts, because that puts the lawyer in the position of leaving their client unprotected - which would be a breach of fiduciary duty. So we would be left in a position of either having to violate the bar rules or violate our duty to our client.

Lee Lundy

I thought the 2008 change only instituted FDIC insurance in unlimited amounts for IOLTA accounts. I thought these were previously covered, under FDIC advisory opinions in 1992 and 1998, up to the FDIC insurance amount for each client (as if each client were a separate depositor. If this is true, the change (going back to $250K of coverage per client) will affect only a few clients.

AngelaTC

We got by without it until 2008, we can get by without it again.

Michael Eisenberg

I don't think this is good. It puts client's moneys at risk and an undue burden on lawyer representation.

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