September 30, 2011
SBAC member Scot Zoellick and American Chartered Bank, would like to inform SBAC members of IOLTA Account Changes. Effective September 1, 2011, new trust account rules provide for three essential changes from current practice.
1. Lawyers will have to continue to segregate client funds, but the rule clarifies that they will have only two banking options as to where they can hold client money.
â€¢ An IOLTA is to be used for the deposit of nominal or short term client funds. It is to be used for all pooled funds.
â€¢ A separate, interest-bearing non-IOLTA client Trust Account is to be established to hold funds of a specific client or third person with the specific client designated as the income beneficiary.
2. Specific record keeping requirements for these accounts are defined.
3. The rule requires that all banks notify the Attorney General and Disciplinary Commission (ARDC) when a client Trust Account is overdrawn.