FREQUENTLY ASKED QUESTIONS
WHAT TAX ID NUMBER SHOULD BE ON THE ACCOUNTS?
Every DC IOLTA account uses the DC Bar Foundation Tax ID Number: 52-1109547. That is because the DC Bar Foundation is the owner of the interest earned on every DC IOLTA account.
PLEASE NOTE: The DC Bar Foundation does not own the IOLTA accounts, it only owns the interest.
WHAT IS IOLTA?
IOLTA stands for Interest on Lawyers Trust Accounts. IOLTA programs operate in every state, DC, and the Virgin Islands. Established by courts or legislatures, the programs allow lawyers to place nominal or short-term client funds in a single interest-bearing account. Interest is remitted to a designated program – here the DC Bar Foundation.
WHAT DOES IT MEAN TO BE A PRIME PARTNER?
Prime Partner banks have increased the value of their partnership with the DC IOLTA program by paying higher yields on IOLTA accounts to support the legal services safety net in the District of Columbia. The Prime Partner Program will recognize those banks that choose to go above and beyond the eligibility requirements of the revised Rule to support the DC IOLTA program in its mission to ensure that low-income persons in the District of Columbia have access to critically needed legal aid by designating them as DC IOLTA’s Prime Partner Institutions. Download the Prime Partner Package for information about the requirements and benefits of becoming a Prime Partner.
WHAT DO WE NEED TO KNOW ABOUT ACCOUNT TITLES?
All DC IOLTA Accounts must include both the name of the lawyer/law firm and the phrase “IOLTA” or “Trust Account.”
WE WOULD LIKE TO OFFER IOLTA ACCOUNTS TO DC LAWYERS. CAN WE JUST START OFFERING IT?
No! DC lawyers can only hold trust accounts, including DC IOLTA accounts, at financial institutions that have been approved by the DC Board on Professional Responsibility.
WE HAVE BEEN APPROVED. WHAT’S NEXT?
Download the DC Bar Foundation’s Guidelines for Financial Institutions. That will contain all the information you need to get started and to submit reports and remittances to the DC Bar Foundation. If you have any questions, contact: firstname.lastname@example.org or call 202-467-3750 text 112.
If you haven’t already signed up as a DC Prime Partner this is the right time to do so.
SHOULD OUR BANK OFFER DC IOLTA ACCOUNTS?
No bank is required to offer IOLTA accounts or to participate in an IOLTA program. However, many financial institutions offer such accounts as a convenience to their lawyer or law firm customers.
HOW WAS THE IOLTA BENCHMARK RATE SET?
The benchmark rate was set based on a market analysis of products offered by DC IOLTA participating banks. The average rate of such products was taken and forms the basis for the benchmark.
HOW DO WE BECOME A DC APPROVED DEPOSITORY?
The DC Board on Professional Responsibility handles the approval process. As part of that process, the DC Bar Foundation will need to review and approve the rate(s) your bank proposed to offer for DC IOLTA accounts. Your institution will also need to complete an undertaking (agreement) with the DC Board on Professional Responsibility. A copy of all the forms you need is available here.
DO THE NEW IOLTA RULES SET INTEREST RATES FOR DC IOLTA ACCOUNTS?
No. The rules require that rates be “comparable.” Your bank has three choices in proposing an interest rate under the DC IOLTA Program. Your bank can provide the documentation outlined in the comparability toolkit, demonstrating that your proposed IOLTA rate is comparable with similar products AT YOUR INSTITUTION. Your bank can also elect the DC IOLTA benchmark rate. The third option is to join us at the Prime Partner rate. More information is in the Prime Partner Package.