A bill that would amend the Federal Credit Union Act to extend share insurance coverage to funds held in a member account on behalf of another individual has advanced in the House.
Reps. Ed Royce (R-Calif.) and Ed Perlmutter (D-Colo.) formally introduced H.R. 3468, the Credit Union Share Insurance Fund Parity Act, late on Wednesday. The House Financial Services Committee passed the legislation on Thursday.
CUNA and NAFCU have both voiced support for the bill.
“Consumers often do not distinguish between the government backing on accounts at financial institutions. It is important that the law dictate that there is no difference in coverage, so as not to favor one type of institution over another in the marketplace,” said NAFCU Vice President of Legislative Affairs Brad Thaler in a letter to House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-Calif.).
If passed by Congress and signed into law by President Obama, the bill would provide insurance coverage for Interest on Lawyers Trust Accounts.
In a press release, CUNA said “the situation puts credit unions at a disadvantage to attract this type of account if all the clients must be members, rather than just the attorney establishing the account.”