Feb. 17, 2010 – With just one click, lawyers now can determine which Wisconsin banks and credit unions are eligible to hold IOLTA accounts and which financial institutions voluntarily pay premium interest rates to the Wisconsin’s Interest on Lawyers’ Trust Accounts program.
In January, the Wisconsin Trust Account Foundation, Inc. (WisTAF) published a list on its Web site of 232 IOLTA participating financial institutions, after reviewing product, rate, and fee information for each of the banks. WisTAF, as the administrator of the Wisconsin Supreme Court’s IOLTA program, developed the list as required by the newly amended SCR 20:1.15.
“Verifying the alignment of more than 230 individual financial institutions with the amended rule was a substantial task made possible by the thorough and timely cooperation of participating banks,” reported WisTAF Executive Director De Ette Tomlinson. “It has been a pleasure to work closely with so many capable and generous members of the state’s banking community. WisTAF anticipates the continued development and strengthening of these partnerships in the future.”
Under the amended rule, effective Jan. 1, 2010, 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. In consultation with WisTAF, several institutions raised their IOLTA rates in order to align with the rule and remain eligible to offer IOLTA accounts.
The expected outcome is that all IOLTA accounts will be treated equitably, resulting in an increase in IOLTA revenues generated for civil legal services to Wisconsin’s low-income population – including victims of domestic violence, financial scams, and mortgage fraud.
WisTAF will monitor financial institutions’ ongoing alignment with the rule and update the list periodically, as well as conduct a comprehensive annual review of all the institutions, as required by the rule. WisTAF will work with any institutions that might fall out of alignment.
While only a few financial institutions with a limited number of active IOLTA accounts voluntarily withdrew from the program, the vast majority expressed their intent to continue to meet their law firm customers’ business-banking needs. Pursuant to SCR 20:1.15(cm)(2)d., the Office of Lawyer Regulation (OLR) will notify any affected lawyer or law firm of the need to move an existing IOLTA account and will provide them with time to transfer the accounts.
Prime Partners – Generosity that goes above and beyond
Seventeen IOLTA participating financial institutions have taken their dedication to the communities they serve to a new level by participating in WisTAF’s new Prime Partner program.
Prime Partners are IOLTA participating financial institutions that go above and beyond IOLTA participation requirements by choosing to pay interest rates on IOLTA accounts that are at least a half-percent higher than they pay on similarly situated non-IOLTA accounts.
“The promise of increased IOLTA rates comes at a time of dire need for increased revenue for legal aid for impoverished Wisconsinites,” Tomlinson said. “Because of the severe economic downturn, IOLTA rates have plummeted, while the demand for legal services across the state has grown.”
Since September 2007, the Federal Reserve has lowered the Federal Funds Target Rate from 5.25 percent to a historically low range of 0.00 percent to 0.25 percent. Because the rates on many accounts are linked to the Federal Funds Target Rate, IOLTA revenue has decreased dramatically during this period. Attorneys and law firms can help sustain IOLTA and civil legal aid to Wisconsin’s low-income residents by banking at a Prime Partner financial institution or encouraging your financial institution to join the program.
For more information about the IOLTA program, newly amended SCR 20:1.15, and how to encourage your financial institution to join the Prime Partner program, please contact WisTAF at (608) 257-6845 or (877) 749-5045 or via email at service@wistaf.org.
By Rebecca Murray, Program Manager, Wisconsin Trust Account Foundation, Inc.
