BOSTON — The past several months have seen the high courts in several states adopt amendments to IOLTA rules and guidelines with the goal of increasing IOLTA revenues, the National Association of IOLTA Programs reports.
In June, the Connecticut Superior Court endorsed a proposal for an amendment adding a comparability requirement to the state's IOLTA rule. Effective Sept. 1, the amended rule will require banks holding IOLTA deposits to pay no less on those deposits than the highest interest rate or dividend paid to a bank's own non-IOLTA customers when the IOLTA account meets the same balance or other eligibility qualifications.
The Connecticut Bar Foundation, which operates the state's IOLTA program, expects that this change will double its IOLTA revenue. On May 18, the Supreme Court of Mississippi amended the state's IOLTA rule to convert the IOLTA program from opt-out to mandatory status. The new rule will require Mississippi attorneys who handle client funds to offer IOLTAs starting Jan. 1, 2007. The move to mandatory is expected to boost IOLTA revenues.
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"The legal profession values this worthwhile partnership with the banking community. Not only do participating banks serve a worthwhile cause, they also have found IOLTA accounts to be an excellent source of deposits," NAIP said.
IOLTAs have been offered since the early 1980s and the interest generated from them is used in a variety of ways. Legal Services Corporation of Virginia recently gave a $75,000 grant to Charlottesville-based JustChildren Program of the Legal Aid Justice Center to increase the number of legal aid lawyers to handle cases involving low-income families. Many law schools, pro bono programs and state and local bar associations also sponsor small business advisory programs. Although lawyers are providing free or low-cost legal services to a for-profit enterprise, the client is frequently a micro-business, or a business earning less than $35,000 per year, having fewer than six employees, and located in a distressed area. –[email protected]
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