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Frequently Asked Questions - Banks/CUs
Q: Do all attorneys need IOLTA accounts?
A: Only attorneys that handle client trust funds that are nominal in amount or held
for a short time are required to establish IOLTA accounts. Licensed attorneys in
Texas who do NOT handle client trust funds are not required to establish an IOLTA
account.
Q: Where do attorneys deposit client trust funds that do not meet the short-term
or nominal fund requirements of IOLTA?
A: Client trust funds that do not meet the nominal or short-term fund requirements
of an IOLTA account should be deposited in a separate demand account to earn interest
for the benefit of that client. The attorney must use that client’s tax ID
# instead of the Foundation’s tax ID #.
Q: How can a financial institution become eligible to hold IOLTA funds?
A: If your financial institution currently holds IOLTA accounts, and you would like
to learn more about becoming eligible, visit the Become
an Eligible Financial Institution section for more information.
If your institution does not currently hold IOLTA accounts, please contact
Janice Cappiello at 512.320.0099, ext. 108, before opening IOLTA accounts.
You must acquire a bank code and a packet of instructions and forms from the Foundation
before qualifying for the eligibility process.
Q: How do financial institutions assist attorneys or law firms in opening IOLTA
accounts?
A: The financial institution must complete the IOLTA Notice to Financial Institution, which instructs the
financial institution how to establish an IOLTA account. The attorney, law firm
or financial institution must then mail or fax a copy of the completed form to the
Texas Access to Justice Foundation.
Q: Are IOLTA accounts subject to service charges? Who pays the services charges?
A: Allowable reasonable fees are the only fees and service charges that may be deducted
by an eligible institution from interest earned on an IOLTA account. Allowable reasonable
fees may be deducted from interest or dividends on an IOLTA account only at the
rates and in accordance with the customary practices of the eligible institution
for non-IOLTA customers. No fees or service charges other than allowable reasonable
fees may be assessed against the accrued interest or dividends on an IOLTA account.
Any fees and service charges other than allowable reasonable fees shall be the sole
responsibility of, and may only be charged to, the attorney or law firm maintaining
the IOLTA account.
Q: Does the Foundation pay for the checks, deposit slips and other related fees
on the client trust accounts?
A: No. Any fees and service charges other than allowable reasonable fees shall be
the sole responsibility of, and may only be charged to, the attorney or law firm
maintaining the IOLTA account.
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