At a time when interest rates paid on IOLTA accounts are steadily declining, Citizens Bank recently announced changes that are expected to generate $1 million dollars in additional revenue for the Interest on Lawyers Trust Account (IOLTA) program in the coming year. The additional interest means a dramatic boost in funding for legal aid programs and justice projects that are supported by IOLTA.
The program's funds are used to provide legal assistance to children, the elderly, victims of domestic violence and others with severe legal problems. They also fund projects designed to improve the administration of justice.
As of Nov. 29, 2001, IOLTA accounts at Citizens Bank with balances of more than $100,000 began earning 1.75 percent, while those with more than $200,000 began earning 2 percent. Prior to the change, all Citizens IOLTA accounts were earning 1.50 percent. Citizens Bank accounts contain 22 percent of current Massachusetts IOLTA funds.
"This new tiered rate affirms our commitment to our law-firm customers, the IOLTA program and the community at large," said Tom Hollister, president and CEO of Citizens Bank of Massachusetts. "As a leading bank for law firms, we recognize the importance of IOLTA and are pleased to provide additional support to these important community initiatives"
"We are delighted that Citizens has raised its IOLTA rates. The associated increase in revenue to the IOLTA program will be significant, and will benefit the low-income recipients of legal aid," said Tony Doniger, chair of the IOLTA Committee. "Believe me, the needs are great. Access to justice is a real issue for low-income people in Massachusetts."
Lawyers and legal organizations can create powerful incentives for local banks to increase their IOLTA interest rates or create higher-yielding IOLTA products by placing attorney and client funds in banks that recognize the important role IOLTA funds play in the community. By selecting banks with the best record in this area, attorneys can have a significant impact on the ability of Massachusetts residents to obtain crucial access to the justice system.