Interest on lawyer trust accounts (IOLTA) provide a substantial component of funding that is used to provide legal aid to needy individuals throughout the United States. However, IOLTA program revenues fluctuate with the deposit interest rates, which have remained near zero after the onset of the 2008 global financial crisis. The Comment examines IOLTA rate rules across the country, and the impact of reduces IOLTA revenues on legal aid programs. The Comment further asserts that IOLTA rate rules are not adequately designed to account for fluctuation in central bank interest rates, causing unanticipated problems for legal aid funding. Finally, the Comment argues that the current IOLTA rules also encourage inconsistent, and perhaps unfair, participation by banks. The Comment proposes changes to rate and bank participation rules that would alleviate the impacts of economic volatility on IOLTA accounts and legal aid funding.
A Good Rule, Poorly Written: How the Financial Crisis Highlighted the Inadequacy of IOLTA Rate Rules,
Cath. U. L. Rev.
Available at: http://scholarship.law.edu/lawreview/vol64/iss3/9