NOTICE TO LOUISIANA IOLTA BANKS RE: COVID-19

Like your financial institution, the Louisiana Bar Foundation (administrator of the IOLTA program) is continuing to respond to the crisis presented by Covid-19. The Foundation, as you may know, uses the interest earned on IOLTA accounts to help fund civil legal assistance programs across the state.  These legal aid providers are already working to meet the emergency legal needs of low-income residents impacted by the pandemic, and the number in need of such services will grow exponentially as more people lose their livelihood as a result of the economic slowdown.

Because of this urgent need and the critical role banks play as partners in the IOLTA program we are asking all participating IOLTA banks to maintain existing interest rate levels for as long as possible. A significant cut in the overall interest income received by the Foundation will have a devastating effect on the programs we fund. Maintaining current IOLTA rates without reductions will allow us to continue to fund these vital services during these unprecedented times. For those banks facing their own significant economic challenges, at a minimum delaying any potential cuts can make a significant difference and will allow us to better plan for and implement the effects of the reduced funding. In any event, no rate change should be made before receiving LBF certification that the change meets compliance guidelines. Due to the current situation we require at least 30 days advance notice so that we can properly evaluate any proposed reductions and ensure your compliance with Rule 1.15 as an Eligible IOLTA depository.

We would also like to thank and highlight our Prime Partner banks paying the Benchmark (Safe Harbor) interest rate on all IOLTA accounts.  We greatly appreciate your continued support at this critical time, and we will ensure the legal community is well aware of those institutions that answer this important call.

For further information, please contact Tina Ferrera at This email address is being protected from spambots. You need JavaScript enabled to view it.

• pdf Louisiana Supreme Court IOLTA Rule (385 KB)
• pdf Certified as Eligible Financial Institutions (44 KB)
  

  New Program Participants

• pdf Financial Institution Certification Statement Form (77 KB)
• New IOLTA Remit Template in Excel
• Enrollment Forms
  

  Existing Program Participants

• pdf Rate Product Adjustment Form (14 KB)
• spreadsheet New IOLTA Remit Template in Excel (100 KB)
• Enrollment Forms

The Louisiana Supreme Court approved amendments to the LSBA Rules of Professional Conduct (Rule 1.15 Safekeeping Property, IOLTA Rules) that require eligible financial institutions to pay fair and comparable rates of interest on their IOLTA accounts. The following are frequently asked questions about rate comparability:

Questions and Answers on IOLTA Rate Comparability

1. What does the IOLTA rate comparability rule do?
   Introduces competition for IOLTA accounts by permitting brokerage firms to participate in IOLTA;
   Permits use of government money market funds for IOLTA; and
   Defines institutions eligible to hold IOLTA accounts as only those institutions which pay IOLTA account customers the highest interest rate or dividend generally available at their own institution to similarly situated non-IOLTA customers.
2. When was the rule effective?
   The rate comparability rule was effective on April 1, 2008 and remains in effect today. Due to the extended period of low interest rates (2008-2016) financial institutions may not have had to make frequent adjustments to their IOLTA rates in some time, however, as deposit rates rise it is important for all institutions to insure that IOLTA accounts receive a rate no less than that paid to comparable customers. 
3. Does the rule require attorneys or law firms to contact their bank?
   No. When necessary, the Foundation will initiate compliance activity on an institution-by-institution basis and will contact affected attorneys or law firms with specific information and assistance. Affected attorneys and law firms only will need to sign their institutions standard account agreements as necessary to open and maintain their IOLTA account.
4. Are attorneys or law firms required to move their IOLTA accounts to institutions paying higher rates?
   No. The rule only requires institutions to pay IOLTA accounts the highest rate or dividend generally available to similarly-situated non IOLTA account customers at their own institution. Only in the event that a financial institution is no longer eligible to hold IOLTA accounts would an attorney or law firm be required to move their account to another institution.
5. Is this voluntary for attorneys and law firms?
   No. The rule requires attorneys and law firms to maintain their IOLTA account only at eligible banks, or investment companies which comply with the interest or dividend requirement of the new rule and have been certified by the Foundation. Our website contains a complete list of eligible institutions.
6. Are attorneys and law firms responsible for monitoring their institutions compliance with the interest or dividend requirement rule?
   No. The Foundation will monitor to ensure compliance.
7. What must financial institutions do?
   Financial institutions must meet the rate comparability provisions of Rule 1.15 to continue to be eligible to hold IOLTA deposits in Louisiana. The Louisiana Bar Foundation as administrator of the IOLTA program is responsible for certifying compliance with the IOLTA Rule. Institutions that are certified as eligible to hold IOLTA deposits are identified on the Foundation’s website.
8. Where can I get more information about the new rule?
   By contacting the Foundation: The Louisiana Bar Foundation 1615 Poydras Street, Suite 1000 New Orleans, LA 70112 Phone: (504) 561-7309 Fax:(504) 566-1926 Email This email address is being protected from spambots. You need JavaScript enabled to view it.