Lawyers Journal

A little effort can raise a lot for legal services

Every Massachusetts lawyer can increase access to the civil justice system by writing a single letter or making a single phone call.

Here's how. The Massachusetts Interest on Lawyers Trust Accounts (IOLTA) program, which funds legal services and improvements in the administration of justice, continues to work to improve the yield of banks' IOLTA accounts. Although the Federal Reserve has raised interest rates seven times over the past year to a rate of 2.75 percent (as of this writing), the interest rates banks pay on IOLTA accounts generally remain very low.

In fact, some banks offer gross interest rates as low as 0.20 percent (two-tenths of 1 percent). Bank of Western Massachusetts (Springfield), Flagship Bank and Trust (Worcester) and Boston Private Bank and Trust (Boston) are among the state's largest depository of IOLTA funds, yet all pay interest rates of only 0.20 percent (as of this writing). These rates are substantially below those paid by the other top IOLTA banks, and among the lowest paid in the state by any bank, regardless of size.

The IOLTA Committee strongly believes IOLTA accounts should generate higher yields because (1) the interest earnings provide an important public benefit (consistent with banks' Community Reinvestment Act obligations), (2) IOLTA accounts generally have higher average balances and (3) IOLTA accounts are core accounts of law firms who frequently maintain substantial banking relationships.

Several banks recently have opted to pay a higher rate of interest on IOLTA accounts in recognition of the large average balances in the accounts and the special public purpose for which the funds are used. Next month, we will publish a chart listing those banks and others designated as "Leadership Banks" by the IOLTA Committee. These are banks that pay an above-average interest rate and charge no fees to IOLTA or normal service fees to attorneys. If your bank is not on the list of leadership banks, we encourage you to write a letter or make a phone call to the bank urging them to become a leadership bank.

An expression of concern by the banks' attorney customers can help convince banks to increase IOLTA yield to competitive levels. We encourage attorneys to take an active role in choosing their IOLTA bank, and in increasing IOLTA revenue. You can call the IOLTA Committee at any time to see whether your bank is a Leadership Bank, or visit its Web site at www.maiolta.org.

A single letter or phone call could help increase access to the civil justice system for scores of Massachusetts citizens.

 

Jayne Tyrrell is the executive director of the Massachusetts IOLTA Committee, Boston.

©2014 Massachusetts Bar Association