Lawyer IOLTA accounts that help fund civil legal aid and other legal programs are likely to lose their unlimited federal insurance coverage on Jan. 1.
The ABA Governmental Affairs Office says it appears unlikely that lawmakers will act this year to extend the unlimited coverage provided by the Federal Deposit Insurance Corp., according to an ABA statement.
If Congress does not act, the amount of FDIC insurance available will be $250,000 per client, per financial institution, as long as the account is properly designated as a trust account and there is a proper accounting of each client’s funds.
IOLTA grants totaled $125 million last year. About 90% of the money supports legal aid offices and pro bono programs.