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Other Organizations : NLTAF/IOLTA
NEBRASKA LAWYERS TRUST ACCOUNT FOUNDATION
P.O. Box 95103
Lincoln, NE 68509
402-475-1042
The Nebraska Lawyers Trust Account Foundation (NLTAF) administers
the Interest On Lawyers Trust Account (IOLTA) Program and the following
is a brief history of IOLTA.
Traditionally, lawyers have been ethically bound to keep clients'
funds separated from their own in a separate trust account. Usually
the funds were held in a regular bank checking account. In May,
1984, the Supreme Court of Nebraska amended the Code of Professional
Responsibility, Disciplinary Rule 9-102, to allow for the establishment
of interest-bearing client accounts. The Supreme Court Rule specifically
authorizing the establishment of interest-bearing trust accounts
for client funds was adopted. These client funds are nominal in
amount or held for a short period of time. This rule stated that
the sole beneficiary of the interest on the accounts must be the
Nebraska Lawyers Trust Account Foundation and these accounts must
be readily available for withdrawal.
In December 1992, the Supreme Court of Nebraska adopted an amendment
to the above Rule that requires all lawyers or law firms to maintain
an interest-bearing account, unless an individual opts-out. A lawyer
or law firm may decline (or opt-out) to participate in the program
by filing a Notice of Declination with the Nebraska Supreme Court
by February 15 of each year.
The basic concept of an IOLTA Program is that public good can be
promoted by converting non-interest bearing trust accounts into
interest-bearing trust accounts. Currently, the IOLTA Program is
now being offered by over two hundred and forty
financial institutions (pdf) across the state.
For member banks, the Federal Reserve System has authorized for
deposit in NOW accounts funds deposited pursuant to the IOLTA Program
established by the Nebraska Supreme Court Rule. The Federal Deposit
Insurance Corporation has concurred in this opinion of the Federal
Reserve System for institutions insured by the FDIC. The Federal
Home Loan Bank Board has also issued similar authority for those
institutions which are Federal Savings and Loan Insurance Corporation
(FSLIC)-insured savings and loan associations or savings banks.
(Copies of letters available upon request).
Only simple reporting mechanisms are needed to operate the IOLTA
program. The IOLTA accounts will be similar to other interest-bearing
accounts offered by financial institutions, except financial institutions
remit interest earned on IOLTA accounts at least quarterly to NLTAF.
A statement showing the account name, service fees deducted, and
the amount of interest earned by the account should be forwarded
to NLTAF. The participating attorney or law firm should receive
a copy of the statement. Customary financial institutions' service
charges for maintaining the account will be deducted from the interest
generated by the account. If the interest is insufficient to cover
the cost, charges are provided from subsequently earned interest
or by NLTAF. As a result, financial institutions will be compensated
for administrative costs related to the program.
NLTAF is a 501(c)(3) tax-exempt organization and is administered
by a fourteen member Board of Directors. The Foundation is headquartered
at the Roman L. Hruska Law Center,P.O. Box 95103, Lincoln, Nebraska
68509, telephone: (402)475-1042.
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