IOLTA & BANKS

Massachusetts financial institutions play a critical role in the success of the IOLTA Program. Roughly two hundred banks and credit unions maintain approximately 20,000 IOLTA accounts with combined balances in excess of $2 billion. The Committee provides substantial information and support to these institutions and the resulting interest income funds hundreds of non-profit legal services programs across the Commonwealth.

A financial institution that wants to offer IOLTA accounts should contact the Committee for our “New Bank Packet”, which contains the information necessary to get started in the program. Additionally, institutions with specific questions can access our Handbook for Financial Institutions for requirements and answers to specific operational and policy questions related to managing an IOLTA program. Some of the most frequent questions appear below.

“IOLTA” or “Clients’ Funds” should appear in the title of the account, along with the attorney or firm name and address. “IOLTA” should also appear on checks or deposit tickets but variations are allowed to accommodate specific circumstances.

Use the tax ID number that is listed on the Notice of Enrollment: 04-3168608. Do not use the attorney’s or the client’s tax ID number.
Set up the account with the attorney’s or the firm’s address. The IOLTA Committee should not receive and takes no responsibility for monthly statement, notices, checkbooks, and any other correspondence mistakenly mailed to the IOLTA Committee.

No. You should give a copy of the NOE to the attorney for their records. Advise the attorney that they must register the IOLTA account on the MA IOLTA website using the information on the completed NOE. Neither the financial institution nor the attorney should mail a copy of the NOE to the IOLTA Committee.

No. A financial institution must be certified by the IOLTA Committee as an eligible institution. Eligible financial institutions are those that have been certified in compliance with the interest rate comparability and other provisions of the 2009 IOLTA Guidelines. Financial institutions must be domiciled in Massachusetts to be eligible. Lawyers and law firms cannot comply with the Massachusetts IOLTA requirements unless they use an eligible Massachusetts institution.

The vast majority of Massachusetts banks do offer IOLTA accounts to their customers. You can find a list of eligible financial institutions here. Many, in fact, have recognized the important public purpose served by the IOLTA program and have waived fees on these accounts. If your bank is unable to provide you with an IOLTA account and it is not practical for you to use another bank for this purpose, please contact the IOLTA Committee, which will work with your bank to attempt to resolve the problem.

Banks can support the IOLTA program in its mission to ensure that low-income and vulnerable Massachusetts residents have access to critical needed legal aid by becoming a Leadership Institution. Leadership Institutions agree to pay the higher of 75% of the Federal Funds Target Rate or 1.00% net interest on all IOLTA Funds. Leadership Institutions will be highlighted by the IOLTA Committee so that attorneys and law firms are aware of their contributions and exceptional support of the program.
Eligible financial institutions can also apply an index, or “Safe Harbor” rate equal to the higher of 55% of the Federal Funds Target Rate or 0.75%. Institutions choosing the Safe Harbor rate help to meet the legal needs of Massachusetts residents by ensuring their rate maintains a minimal level at all times and increases with other market rates.