TAJF-News Updates

The Wall Street Reform Act (Dodd-Frank Act) inadvertently failed to include full FDIC coverage on IOLTA accounts (see Background below). The current insurance expires Dec. 31 and we need a legislative fix before Congress goes into recess. Please send a letter (sample below) in support of the House Bill filed by Texas Representative Lloyd Doggett to your local Congress member.

House Bill 6398 by Representative Lloyd Doggett
Letter to congressional delegation from Dick Tate, Chair, Texas Access to Justice Foundation and Harry M. Reasoner, Chair, Texas Access to Justice Foundation and letter from State Bar President Terry Tottenham

Background on the issue

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August 2009

Conference of Chief Justices and State Court Administrators Adopt Resolution in Support of Increased federal funding for the Legal Services Corporation.

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May 20, 2009

FDIC Deposit Insurance Coverage Reminder

Deposits at FDIC-insured institutions are now insured up to at least $250,000 per depositor through Dec. 31, 2013. On Jan. 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts which will remain at $250,000 per depositor. (This supersedes the Oct. 3, 2008, changes.)

The extension announced on May 20, 2009, does not apply to the Transaction Account Guarantee Program. The unlimited coverage under the Transaction Account Guarantee Program is only in effect for depositors at participating institutions through Dec. 31, 2009. This means that as of Jan. 1, 2010, funds held in IOLTA accounts, as well as those held in non-interest bearing transaction accounts, will be treated the same as the funds held in all other FDIC insured accounts: each depositor's total funds held in the financial institution will be insured up to a total of $250,000.

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State Bar and Local Bars Adopt Resolutions Supporting Funding for Legal Aid

State Bar of Texas, April 1, 2009

Austin Bar Association, April 29, 2009

Cameron County Bar Association, April 20, 2009

Dallas Bar Association, March 19, 2009

El Paso Bar Association, March 23, 2009

Houston Bar Association, March 23, 2009

Lubbock County Bar Association, March 9, 2009

San Antonio Bar Association, April 14, 2009

Smith County Bar Association, March 20, 2009

Texarkana Bar Association , May 12, 2009

Texas Young Lawyers Association , May 2, 2009

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Jan. 19, 2009

"Interest Rate Drop Has Dire Results for Legal Aid", New York Times

Jan. 13, 2009
Texas Supreme Court Orders Changes to IOLTA Rule Calculation Court Orders New Calculation for IOLTA Accounts

Jan. 2, 2009

Opinion by Justice O'Neill in San Antonio Express-News "Legal aid is crucial to a fair system"

Dec. 23, 2008

NPR Marketplace features Texas in "Legal aid funding on the decline"

Free Online Legal Help Now Available for Hurricane Ike Victims

Nov. 21, 2008
Texas Supreme Court Requires Attorneys to Place IOLTA Accounts at Eligible Banks
On Nov. 21, 2008, the FDIC extended its unlimited protection of non-interest bearing accounts under the Temporary Liquidity Guarantee Program (TLGP) to include Interest on Lawyers’ Trust Accounts (IOLTA). An individual client's funds deposited in IOLTA accounts are fully insured regardless of the amount. This provision took place immediately and is valid through December 31, 2009.

As long as your account is at a bank that has opted-in to this program, you no longer have to worry about whether IOLTA account balances will be insured, nor do you need to worry about establishing IOLTA accounts at several different financial institutions. The entire balance in your IOLTA account will be insured by the FDIC under the TLGP. You may leave your IOLTA account as is and be assured that the interest earned will continue to fund legal aid for low-income Texans.

The December 2008 Texas Bar Journal included an article on "Client Trust Accounts and the Financial Crisis" that went to press before this November ruling by the FDIC. You may refer to the FDIC’s web site http://www.fdic.gov/regulations/resources/TLGP/faq.html for more information

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Jan. 19, 2009

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Dec. 23, 2008

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