Dec. 16, 2009 – On July 1, 2009, the Wisconsin Supreme Court issued an order amending the trust account rule pertaining to Interest on Lawyers’ Trust Accounts (IOLTA), SCR 20:1.15, effective Jan. 1, 2010. Under the new rule, an IOLTA account must be held at an “IOLTA participating institution,” which is newly defined to be a financial institution that pays interest rates on IOLTA accounts that are at least as high as the rates it pays to non-IOLTA customers holding accounts meeting the same minimum balance and other requirements.

The expected outcome is that all IOLTA accounts will be treated equitably, which will result in an increase in IOLTA revenues generated for civil legal services to Wisconsin’s low-income population.

A few items you should know about the trust account rule changes:

1. No need for you to take action at this time

WisTAF is working directly with financial institutions to help them transition smoothly should they need to make any changes to IOLTA accounts. If your financial institution chooses an option that requires action on your part, WisTAF will contact you. 

2. Your trust account likely won’t be affected

Most financial institutions already are in alignment with the rule’s new provisions. The vast majority of IOLTA accounts will remain unchanged. 

3. Easily locate IOLTA-eligible financial institutions

Lawyers who want to know the IOLTA-eligibility status of a financial institution conveniently will be able to access a list published on the WisTAF Web site beginning Jan. 8, 2010. 

4. Financial institutions now have the opportunity to support civil legal services for the poor

Financial institutions have the option of further increasing access to justice for low-income residents of your community by joining the newly created Prime Partner program. These Prime Partner financial institutions volunteer to pay slightly higher rates than required under the new rule’s rate comparability requirement. To determine whether your financial institution is a Prime Partner, visit the WisTAF Web site after Jan. 8, 2010.

5. Ask and you might receive

The amended rule limits the types of fees your financial institution is allowed to charge on your IOLTA account. Many financial institutions choose to waive fees altogether on IOLTA accounts. Explore these options with your financial institution to maximize how hard your trust account funds are working to support civil legal aid.

During the last 23 years, WisTAF has granted more than $33 million to agencies that provide civil legal services to Wisconsin’s low-income population. From Superior to Milwaukee, funds generated via the IOLTA program have enabled legal service providers to help meet the increasing needs of low-income families in the areas of housing, medical care, employment, and domestic abuse, among others. You and fellow lawyers and judges – through your partnerships with financial institutions – have made this feat possible. During this season of giving, and giving thanks, please know your contribution is recognized and immensely appreciated.

Questions regarding changes to the IOLTA trust account rule? Visit the WisTAF Web site for updated information, or contact the WisTAF office at (877) 749-5045 (toll free).

Related: Banks to pay comparable interest on IOLTA accounts (Wisconsin Lawyer)