AUGUSTA, Maine — Despite questions on certain eligibility criteria, the Maine Supreme Court recently ruled that all of Maine credit unions could indeed offer interest on lawyers 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. If these funds are large or held for a long period of time, the attorney customarily deposits these monies in an interest-bearing account for the benefit of the client. Interest from collective, short-term trust accounts is paid to a non-profit foundation for programs like providing legal services to the poor.
In September, the Maine Supreme Court ruled that credit unions may accept IOLTA deposits for all deposits at low-income designated credit unions regardless of membership status and for funds deposited that belong to a member of the credit union question. The rule takes effect Jan. 1, 2008. Once voluntary, attorneys will now be required to have IOLTAs. In addition, in order to be eligible institutions to hold IOLTA funds, credit unions and banks will have to offer the same interest rate or dividend rate on other accounts.
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