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Obama signs bill extending IOLTA account coverage

A bill that extends full FDIC protection of Interest on Lawyer Trust Accounts for two more years has been signed by President Barack Obama.

The law closes an inadvertent loophole created earlier this year by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Previously, trust accounts lawyers set up to hold clients’ funds had full insurance protection from the FDIC. But due to wording in the financial reform law, the definition of a “covered account” was narrowed in a way that would not have covered IOLTA accounts, requiring Congress to act to extend coverage before the Dec. 31 expiration.