Inside the Bar
June 2008
Board supports higher interest rates
for IOLTA accounts to support legal services for poor people
At its May meeting, the Board of
Governors supported a Wisconsin Trust Account
Foundation (WisTAF) petition that encourages financial institutions in
Wisconsin to provide interest rates for Interest on Lawyer Trust
Accounts (IOLTA) that are comparable to those of similarly situated
non-IOLTA business accounts.
“It is unusual for the WisTAF board to come to
the State Bar Board of Governors and ask for support for a
petition,” said WisTAF board member Dean Dietrich. “This is
serious. We are looking at a significant drop in interest revenues for
the next fiscal year for the IOLTA funds, and that means less money to
give to agencies that provide legal services to the
poor.”
According to Dietrich, a recent
six-month study revealed that if interest rates on IOLTA accounts were
the same as those of general business accounts, WisTAF could net
approximately $2.4 million more per year. There are no changes regarding
how attorneys manage IOLTA accounts. Attorneys will continue to be
required to maintain IOLTA accounts in participating institutions that
meet IOLTA criteria, including interest comparability.
“The most substantive proposed
change concerns IOLTA interest rate requirements,” said Dietrich.
“These requirements set forth a variety of comparability account
options for banks so that attorneys holding IOLTA accounts be paid the
highest rate of dividends generally available to other customers when
IOLTA accounts meet the same minimum balance or other qualifications.
The change should only affect large IOLTA accounts, as many banks
already provide comparable interest rates for smaller accounts,”
said Dietrich.
WisTAF Executive Director De Ette Tomlinson noted
that, “IOLTA participation is voluntary for banks across the
board, and that will not change. All of the 18 states that have adopted
comparable rate provisions assure us that this change does not adversely
affect lawyers and their administration of their IOLTA trust
accounts,”
“Basically banks look at this as a consumer
issue, making sure that attorneys are treated the same as their other
customers as far as the client trust accounts,” said Tomlinson.
“The banks see this as a reasonable request, and they have been
very cooperative in working with the IOLTA program attorneys to make
everything go as smoothly as possible. We anticipate the same thing will
happen here in Wisconsin.”
Appointments/elections. The board approved President-elect
Diane Diel’s
appointments to the Nominating Committee for the FY 09 board chair.
Committee members include Paul Norman, Madison, Chair; and Bill Domina,
Marla Stephens, and Lynn Laufenberg, all of Milwaukee.
Former State Bar President Michelle Behnke, Madison,
Nathaniel Cade Jr.,
Milwaukee,and John P. Macy, Waukesha,were elected to the ABA
House of Delegates. Their
terms begin at the close of the 2008 ABA Annual Meeting in
August.
The minutes will be posted on WisBar after approval at
the June meeting.
Inside the
Bar
