RALEIGH, N.C. -- Though still small in numbers, Coastal Federal Credit Union has joined the short list of credit unions nationwide that have started offering interest on lawyer's trust accounts or IOLTAs.
With IOLTAs, attorneys routinely hold funds in trust for clients to pay costs related to legal services like court filings, depositions and business transactions. Interest from the short-term trust accounts is paid to a nonprofit foundation for programs like providing legal services to the poor.
The $2 billion Coastal FCU said its IOLTAs feature no monthly maintenance fees, minimum balance requirements and unlimited monthly deposit and withdrawals. The credit union said it will forward all dividends from the account, net of service charges, to the North Carolina State Bar IOLTA program. According to the credit union citing North Carolina law, all attorneys that hold money in trust for the clients must obtain an IOLTA by June 30.
In October 2007, the Maine Supreme Court ruled that the state's CUs could offer IOLTAs despite some trepidation from the Maine Bar Foundation, which sought to limit use to CUs with a low-income designation. The foundation later said it encourages all Maine CUs to offer the accounts. In 2006, Washington CUs faced similar resistance from the Washington State Bar Association but the state's Supreme Court ruled in their favor.