Interest on Lawyers’ Trust Accounts (IOLTA)
The Connecticut Bar Foundation receives and distributes the interest generated from lawyers’ trust accounts to support nonprofit organizations that provide civil legal services to low income people in Connecticut. The Connecticut General Assembly established the Interest on Lawyers’ Trust Accounts program in 1984. To view a short video on the history of IOLTA click here.
Connecticut General Statute 51-81c stipulates that the interest is to be used to “. . . provide funding for (1) the delivery of legal services to the poor by nonprofit corporations whose principal purpose is providing legal services to the poor, and (2) law school scholarships based on financial need.” Please click here for answers to Frequently Asked Questions regarding IOLTA. For the current grant year, the Board made grants to 11 nonprofit organizations to provide civil legal services and to three law schools for scholarships. For more information on grant programs, click here.
In 2006, the Judges of the Superior Court charged the Foundation with determining which financial institutions are eligible to offer IOLTA accounts under the rate parity requirements of Rule 1.15. Please click here for a listing of the current eligible financial institutions.
In June 2011, the Judges of the Superior Court voted to amend Rule 1.15 to include the basic financial records and documentation that a lawyer must maintain with regard to all trust accounts of a law firm. Specific guidance is provided on the following: how long these records must be maintained; minimal accounting controls for client trust accounts, including who can be an authorized signatory; the types of checks and check substitutes that may be used; how client receipts must be deposited; and other requirements. Please click here for a copy of the amended court rule, Rule 1.15.
Every U.S. state, Canada, and other countries have IOLTA programs. To learn about IOLTA programs in other states, please visit IOLTA.org.
The American Bar Association Commission on IOLTA has additional information regarding IOLTA programs, news, litigation, and resources. To learn more, click on ABA Commission on IOLTA.
Interest on Trust Accounts (IOTA)
The General Assembly amended the statute in 2005 to include funds from mortgage lenders and is referred to as the Interest on Trust Accounts (IOTA) program. The statute provides that each entity, other than a borrower, having an account established to receive loan proceeds from a mortgage lender shall participate in the program regardless of the amount or the period for which funds are held. As used in the statute “mortgage lender” means. . . any person engaged in the business of making mortgage loans, including, but not limited to, a bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, mortgage lender or mortgage correspondent lender required to be licensed under sections 361-485 to 36a-498a, inclusive.” Click here to go to Connecticut General Statute 51-81c.