Recent Rule Changes

In February 2008, the Nevada Supreme Court approved an amendment to the state’s IOLTA rule converting the IOLTA program from opt-out to mandatory status. The new rule, which requires attorneys who handle client funds to participate in IOLTA, became effective May 1, 2008. With these revisions, Nevada became the 37th state to adopt mandatory IOLTA.

On July 1, 2008, IOLTA interest rate comparability provisions became effective in Hawaii. This IOLTA revenue enhancement strategy requires that lawyers place their IOLTA accounts at a financial institution that pays those accounts the highest interest rate or dividend generally available at the institution to other, non-IOLTA customers when the IOLTA accounts meet the same minimum balance or other requirements. There are now 20 states that have amended their IOLTA rules, regulations or statutes to include comparability provisions.

IOLTA programs provide funding critical to maintaining and improving access to the justice system in communities across the United States. Depending on the state, IOLTA dollars go to support civil legal assistance for poor people, efforts to improve the administration of justice by our courts, initiatives to educate the public about legal issues, and scholarships and clinical instruction for law students.

Here are some recent stories about the organizations and initiatives funded by IOLTA programs:

• IOLTA at Work in Rhode Island: The International Institute of Rhode Island Immigration Law Project
• IOLTA at Work in Ohio: TeamChild Helps Cincinnati-area Children Stay in School
• IOLTA at Work in Maryland: Maryland Legal Aid Bureau Focuses on Low-Income Tenants
• IOLTA at Work in Georgia: Atlanta Legal Aid's Home Defense Program

Constitutional challenges in the federal courts have ended in the wake of the U.S. Supreme Court's decision in Brown v. Legal Foundation of Washington (PDF), 538 U.S. 216, (2003), which found that Washington State's IOLTA program did not violate the Fifth Amendment. The long-standing cases against the Texas and Washington State IOLTA programs were dismissed in late 2003 and early 2004.

In October 2004 the Supreme Court declined to hear a case involving a Fifth Amendment claim brought in Missouri state court against that state's IOLTA program. That decision left standing a March 2004 appellate court decision to dismiss the claim against the IOLTA program.

Read a detailed analysis of the Brown decision or learn more about the background of the litigation.