Bar News - February 18, 2011
Bar Foundation News: Interest-Rate Concerns Cloud IOLTA Outlook
The outlook for the New Hampshire Bar Foundation’s IOLTA program in 2011 is a mixed, but still grim, picture. On the plus side, economic activity is picking up slowly, and recent conversion, by Supreme Court rule, to a mandatory program may increase participation by attorneys somewhat.
However, one of the largest banks in the state recently announced a corporate-wide decision to reduce the interest rates it is paying on IOLTA accounts. In New Hampshire, the decision by Citizens Bank will depress revenues by about $200,000 annually, representing about a 20 percent cut in IOLTA income.
The NH Bar Foundation’s IOLTA program has been a cornerstone of funding for civil legal services in NH. Through IOLTA grants, tens of thousands of our most vulnerable citizens receive free or low cost civil legal services. IOLTA grants also fund educational programs that teach our youth and the public about the law and the justice system.
In 1982, the New Hampshire Supreme Court adopted Rule 50 that requires attorneys to "create or maintain an interest-bearing trust account for clients’ funds which are nominal in amount or to be held for a short period of time." Under Rule 50, the interest generated in these accounts must be transferred to the NH Bar Foundation for charitable purposes. New Hampshire’s IOLTA program was the second IOLTA program launched in the U.S.
For more information about the NH Bar Foundation and IOLTA, visit www.nhbarfoundation.org.