North Carolina Administrative Code › Title 27 - STATE BAR › Chapter 01 - RULES AND REGULATIONS FOR THE NORTH CAROLINA STATE BAR › Subchapter D - RULES OF THE STANDING COMMITTEES OF THE NORTH CAROLINA STATE BAR › Section .1300 - RULES GOVERNING THE ADMINISTRATION OF THE PLAN FOR INTEREST ON LAWYERS' TRUST ACCOUNTS (IOLTA) › Section 01D .1316 - IOLTA ACCOUNTS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) IOLTA
				  Account Defined. Pursuant to order of the North Carolina Supreme Court, every
				  general trust account, as defined in the Rules of Professional Conduct, must be
				  an interest or dividend-bearing account. (As used herein, "interest" shall
				  refer to both interest and dividends.) Funds deposited in a general,
				  interest-bearing trust account must be available for withdrawal upon request
				  and without delay (subject to any notice period that the bank is required to
				  reserve by law or regulation). Additionally, pursuant to
				  G.S.
				  45A-9, a settlement agent who maintains a
				  trust or escrow account for the purposes of receiving and disbursing closing
				  funds and loan funds shall direct that any interest earned on funds held in
				  that account be paid to the NC State Bar to be used for the purposes authorized
				  under the Interest on Lawyers Trust Account Program according to Section
				  .1316(d) below. For the purposes of these rules, all such accounts shall be
				  known as "IOLTA Accounts" (also referred to as "Accounts").
(b) Eligible Banks. Lawyers may maintain one
				  or more IOLTA Account(s) only at banks and savings and loan associations
				  chartered under North Carolina or federal law, as required by Rule 1.15 of the
				  Rules of Professional Conduct, that offer and maintain IOLTA Accounts that
				  comply with the requirements set forth in this Subchapter (Eligible Banks).
				  Settlement agents shall maintain any IOLTA Account as defined by
				  G.S.
				  45A-9 and Paragraph (a) above only at an
				  Eligible Bank; however, a settlement agent that is not a lawyer may maintain an
				  IOLTA Account at any bank that is insured by the Federal Deposit Insurance
				  Corporation and has a certificate of authority to transact business from the
				  North Carolina Secretary of State, provided the bank is approved by NC IOLTA.
				  The determination of whether a bank is eligible shall be made by NC IOLTA,
				  which shall maintain (i) a list of participating Eligible Banks available to
				  all members of the State Bar and to all settlement agents, and (ii) a list of
				  banks approved for non-lawyer settlement agent IOLTA Accounts available to
				  non-lawyer settlement agents. A bank that fails to meet the requirements of
				  this Subchapter shall be subject only to termination of its eligible or
				  approved status by NC IOLTA. A violation of this Rule shall not be the basis
				  for civil liability.
(c) Notice
				  Upon Opening or Closing IOLTA Account. Every lawyer/law firm or settlement
				  agent maintaining IOLTA Accounts shall advise NC IOLTA of the establishment or
				  closing of each IOLTA Account. Such notice shall include (i) the name of the
				  bank where the account is maintained, (ii) the name of the account, (iii) the
				  account number, and (iv) the name and bar number of the lawyer(s) in the firm
				  and/or the name(s) of any non-lawyer settlement agent(s) maintaining the
				  account. The North Carolina State Bar shall furnish to each lawyer/law firm or
				  settlement agent maintaining an IOLTA Account a suitable plaque explaining the
				  program, which plaque shall be exhibited in the office the lawyer/law firm or
				  settlement agent.
(d) Directive to
				  Bank. Every lawyer or law firm and every settlement agent maintaining a North
				  Carolina IOLTA Accounts shall direct any bank in which an IOLTA Account is
				  maintained to:
(1) remit interest, less any
				  deduction for allowable reasonable bank service charges or fees, (as used
				  herein, "service charges" shall include any charge or fee charged by a bank on
				  an IOLTA Account) as defined in Paragraph (e), at least quarterly to NC
				  IOLTA;
(2) transmit with each
				  remittance to NC IOLTA a statement showing for each account:
(i) the name of the law firm/lawyer or
				  settlement agent maintaining the account,
(ii)
				   the lawyer/law firm's or settlement agent's IOLTA Account
				  number,
(iii) the earnings
				  period,
(iv) the average balance of
				  the account for the earnings period,
(v) the type of account,
(vi) the rate of interest applied in
				  computing remittance,
(vii) the
				  amount of any service charges for the earnings period, and
(viii) the net remittance for the earnings
				  period; and
(3) transmit
				  to the law firm/lawyer or settlement agent maintaining the account a report
				  showing the amount remitted to NC IOLTA, the earnings period, and the rate of
				  interest applied in computing the remittance.