Washington Supreme Court Sides with Credit Unions, Allows them to Continue Offering Interest on Lawyer's Trust Accounts
FEDERAL WAY, Wash. -- In a pivotal move for Washington's credit unions, the Washington State Supreme Court recently ruled that they can remain on a list of financial institutions where attorneys house interest on lawyer's trust accounts or IOLTAs.
At issue was a "comprehensive" review conducted in 2003 by the Washington State Bar Association of the Washington Rules of Professional Conduct, which was sent to the Washington Supreme Court in 2004. The association recommended an amendment to RPC 1.14(c) regarding the use of credit unions to house trust accounts, including IOLTAs, according to Judy Berrett, WSBA director of member and community relations. WSBA's contention was because trust accounts must be insured and NCUA only insured attorney trust accounts holding client funds belonging to credit union members, the association believed that NCUA would not insure accounts that held noncredit union member funds even though the trust accounts belonged to a credit union member, for example, the attorney.