INFORMATION FOR FINANCIAL INSTITUTIONS

What is IOLTA?

IOLTA is the acronym for Interest on Lawyers’ Trust Accounts and is a method of raising money, primarily for the provision of civil legal services to indigent people. Rule 4-100 requires that attorneys who handle money belonging to their clients, including settlement checks, fees advanced for services not yet performed or money to pay court fees, deposit the funds in one or more clearly identifiable trust accounts.

If the amount is large or the funds are to be held for a long period of time, the attorney must place the money at interest for the benefit of the client. However, if the client funds are not capable of earning income for the client in excess of the costs of securing such income, then they are pooled in a single account with similar funds of other clients.

The interest generated by the IOLTA accounts is collected by the Trust Fund Program and distributed to 96 nonprofit legal aid organizations that provide civil legal aid to indigent people.

Become an IOLTA-Eligible Institution

Under amended Business & Professions Code Sections 6091.2, 6212, and 6213 effective Jan. 1, 2008, the law requires California lawyers to place IOLTA accounts only at financial institutions that pay interest rates or dividends to IOLTA customers comparable to rates paid to similarly situated non-IOLTA customers.

For more information about becoming an IOLTA-eligible financial institution, please review the following documents:

• Guide for Financial Institutions
• Rate Comparability Information Form
• Remittance Report
• Secure File Transfer Setup Request Form (FTP) -- Electronic Remittance

Eligible Financial Institutions

California’s IOLTA-Eligible Financial Institutions

Leadership Banks

If you would like to become an IOLTA-eligible bank, or if you already are an IOLTA-eligible bank, we encourage you to consider becoming a leadership bank and join our “Peak Your Interest”  campaign aimed at ensuring the highest possible interest rates for trust accounts. Through the years, many financial institutions have taken a leadership role by increasing rates and reducing or waiving monthly service fees on their IOLTA accounts. Currently, a leadership bank pays at least 1percent interest and waives all monthly service fees. The generosity of these banks has increased access to justice for hundreds of thousands of people in California who otherwise would have nowhere to turn for help. 

The State Bar of California collects IOLTA revenue and distributes it to 96 eligible nonprofit organizations that provide legal services in every county in the state. These services include consumer finance, education and health care access, housing, family law and community economic development, just to name a few. These nonprofit organizations provide core legal services that are critical for strengthening local communities and are in complete alignment with Community Reinvestment Act (CRA) objectives. To learn more, please review our brochure, Legal Aid in the Community, which illustrates the commonality between legal aid and community development under CRA.

Become a Leadership Bank

Leadership Bank Enrollment Form

For questions, e-mail IOLTA@calbar.ca.gov or call 415-538-2159.