As interest rates drop to historically low rates amid the COVID-19 pandemic, the State Bar of California continues to work with banks to maintain and maximize the interest income that supports free legal services for vulnerable Californians through the Interest on Lawyers’ Trust Accounts (IOLTA) program. This week, the State Bar announced that eight more financial institutions have agreed to become Leadership Banks, using their financial wherewithal to support access to justice for low-income Californians.
The latest Leadership Banks are:
Bank of the Orient
Commercial Bank of California
First Bank
Nano Banc
New Omni Bank, N.A.
Partners Bank of California
Poppy Bank
Radius Bank
They join the following banks, who were the first of the State Bar’s Leadership Banks:
Wells Fargo, N.A.
Chase Business
Bank of Southern California
“Legal services organizations are at risk of losing millions of dollars in funding this year, as the lion’s share of funding the State Bar provides to them comes from interest earned on Client Trust Accounts,” said Interim Executive Director Donna Hershkowitz. “This comes at a time when the demand for legal services for indigent Californians is likely to increase due to loss of employment, health care, benefits, housing, and other critical matters. We recognize banks that have continued to step up to support access to justice and applaud these financial institutions for their commitment to support legal aid in California communities.”
To become a designated Leadership Bank, financial institutions need to:
Pay at the established compliance rate (ECR) on their IOLTA Accounts. The current ECR is 0.68 percent; and
Waive fees and charges on all IOLTA accounts, regardless of the account’s size.
Legal aid providers working to meet the emergency legal needs of low-income Californians impacted by the COVID-19 pandemic expect the number in need of such services to grow exponentially. While some banks have dropped rates to nearly zero, these Leadership Banks have agreed to rates that will make a significant difference in whether legal services organizations are able to continue to operate and meet the needs of the most vulnerable Californians.
The State Bar of California's mission is to protect the public and includes the primary functions of licensing, regulation and discipline of attorneys; the advancement of the ethical and competent practice of law; and support of efforts for greater access to, and inclusion in, the legal system.
