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State Bar of Michigan Member Advisory
December 21, 2012
Updated January 30, 2013

For IOLTA and Non-Interest-Bearing Accounts

For the past two years, IOLTA accounts and non-interest-bearing accounts enjoyed unlimited FDIC insurance coverage pursuant to Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That provision has a sunset date of December 31, 2012.

Because Congress adjourned without extending that coverage, as of January 1, 2013, FDIC insurance available to IOLTA accounts reverted to the same coverage client funds had before the temporary provision was put in place—$250,000 per owner of the funds (client), per financial institution, assuming that the account is properly designated as a client trust account and proper accounting of each client's funds is maintained. The $250,000 amount is not the cap on the total in the pooled IOLTA account; that cap applies to each individual client's funds in that institution (see item 2 at the FDIC link below). Client trust accounts, including IOLTA accounts, are interest-bearing accounts, but it is also worth noting that non-interest-bearing bank accounts will also have this same $250,000 coverage limit.

Further information on FDIC insurance coverage for IOLTA and other accounts as of January 1, 2013, is at

Member Advisory is an electronic publication of the State Bar of Michigan.

    State Bar of Michigan
    306 Townsend St.
    Lansing, MI 48933-2012
    (517) 346-6300