The New York Interest on Lawyer Account Fund (“IOLA”)

Posted by on November 29, 2018 in New York | 0 comments

The New York Interest on Lawyer Account Fund (“IOLA”)

The New York Interest on Lawyer Account Fund (“IOLA”)

The New York State Interest on Lawyer Account Fund (“IOLA”) helps low income people in New York State obtain help with civil legal problems affecting their most basic needs, such as food, shelter, jobs and access to health care.  The IOLA program is a partnership of lawyers, banks and community organizations. It produces millions of dollars each year to finance legal aid for low income New Yorkers and improvements in the administration of justice throughout New York State.

Participation in New York’s IOLA program is mandatory in two senses. First, every New York lawyer who handles client Funds must maintain an IOLA account. Second, the lawyer must use an IOLA account for qualifying funds, unless he or she uses an account that will generate compute and pay net interest to the client (net of all bank fees and the lawyer’s or law-firms related services). A New York lawyer may not place qualifying funds in a non-interest bearing account. Interest earned on deposits held in IOLA accounts are remitted directly to the IOLA Fund by participating financial institutions. Further information is available at www.iola.org.

Should you enroll? If you are a lawyer who maintains a qualifying client trust account and have not yet opened an interest-bearing IOLA account for making nominal or short-term deposits, you should take steps to do so immediately.

Enrollment takes just two easy steps. (1) Open an IOLA account with a participating financial institution. Banks vary widely in terms of the “net yield” (interest rate less service fees) their IOLA accounts pay into the IOLA Fund. See the list of banks with rate and fee information here. (2) Within 30 days of opening the IOLA account, submit the online Enrollment Form.

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