CHOOSE JUSTICE. INCREASING ACCESS FOR THOSE WITHOUT.
“There is nothing more important to the stability and welfare of our country than our justice system. Critical to the proper functioning of the judicial system is the public’s confidence in and respect for it. We have the chance to see that the needy are provided with the legal services they need, a goal that I strongly believe is critical to the maintenance of the public’s confidence in and respect for our justice system.”
– Honorable John A. Sutro, Jr., Retired, Legal Services Trust Fund Commission Member

About the Campaign

California IOLTA Program

What is IOLTA?

Interest on Lawyers' Trust Accounts (IOLTA) is a unique and innovative way to increase access to justice for individuals and families living in poverty and to improve our justice system.

Attorneys often handle client or third party money - e.g., settlement funds or advance payments for court costs - which they have an ethical obligation to safeguard and segregate in a separate trust account. When the amount held in trust is so small or held so briefly that it will not benefit the client or third party, the attorney is obligated to deposit the funds into a pooled IOLTA account.

In California, attorneys must hold their IOLTA account at an IOLTA-eligible financial institution as defined in Business & Professions Code §6210 et seq. Pursuant to AB 1723, enacted in 2007, IOLTA-eligible institutions must treat IOLTA accounts the same way they treat similarly situated non-IOLTA accounts. In California, approximately 220 banks hold over 47,000 IOLTA accounts, and the interest from those accounts is remitted to the State Bar of California's Legal Services Trust Fund Program (also referred to as the IOLTA program), which pools the interest from these accounts and distributes it to nearly 100 nonprofit legal aid programs throughout California.

Banks Can Gain CRA Acknowledgement and Make a Difference for Low- and Moderate-Income (LMI) Communities by Supporting Legal Aid

Banks doing business in California have the opportunity to make a substantial positive difference in legal aid funding by joining the Peak Your Interest campaign and becoming a Leadership Bank, or by paying the Established Compliance Rate (ECR).

IOLTA is one of the primary sources of funding for services that include:

  • assisting victims of domestic violence
  • advocating on behalf of persons with disabilities
  • ensuring the homeless get available services and benefits
  • providing legal advice to entrepreneurs and micro-businesses in low income neighborhoods

Banks who "Peak their Interest" reflect the intention of the Community Reinvestment Act (CRA) because their support of legal aid to low-income Californians in crisis supports economic self-sufficiency and builds stronger communities. More details about the commonality between legal aid and community development under CRA can be found in the brochure, Legal Aid in the Community.

During these difficult economic times, CRA investments in the community are needed more than ever. It is the hope of legal aid organizations and the low-income people they serve, that financial institutions participating in the IOLTA program consider leveraging CRA by raising interest rates on IOLTA accounts to yields above and beyond what is legally required. Paying higher rates on IOLTA accounts that fund grants to provide legal aid to LMI communities can be an innovative way to leverage your CRA investments.

The Legal Services Trust Fund Program at the State Bar of California is happy to work with your bank or regulatory agency to provide a CRA acknowledgement letter stating how your bank contributes to LMI communities through IOLTA interest payments. By raising interest rates even a small amount, you can exemplify your bank's commitment to uphold the ideals of the federal Community Reinvestment Act, while ensuring access to justice to vulnerable Californians.

Attorneys Can Also Help Increase IOLTA Funding

Attorneys also have the ability to make a substantial difference in the amount of funding generated by IOLTA interest. Attorneys who choose to bank at a financial institution that offers a higher rate of return assist in providing much needed legal aid to people who otherwise would have nowhere to turn for help. By supporting the banks that choose to pay higher interest rates on IOLTA accounts, attorneys can make an enormous difference in IOLTA funding, as shown in the chart below.

Chart illustrating that holding an IOLTA account with a $100,000 balance at a bank that pays 1.0 percent interest to IOLTA will result in $1,000 a month for legal services versus $50 at .05 percent

If you would like to Peak Your Interest, or to receive a CRA acknowledgement letter, please contact Elena Enzweiler at (415) 538-2532 or elena.enzweiler@calbar.ca.gov.