LawyersUSA

The Federal Deposit Insurance Corporation will guarantee all client funds deposited in IOLTA accounts, regardless of the amount.

The Temporary Liquidity Guarantee Program, established last month, now includes Interest on Lawyer Trust Accounts.

The ABA, along with state and local bar associations, had lobbied for the inclusion of IOLTA funds in the program.

"Had the FDIC failed to expand full coverage for IOLTA, lawyers would have had to consider abandoning IOLTA for fully insured non-interest bearing accounts or moving IOLTA funds from community banks to the larger 'too big to fail' banks," ABA president H. Thomas Wells Jr. said in a statement.

"Abandoning IOLTA would have been catastrophic for IOLTA programs in all 50 states, which provide funding for legal aid for the poor. Moving the accounts to larger banks would have defeated the FDIC's purpose in creating the [Program]," he noted.

The recent bank failures had been fueling lawyers' client trust concerns.

– Nora Lockwood Tooher