Establishing an Interest on Lawyers’ Trust Accounts (“IOLTA”) Account
We realize that it will take some of your valuable time to establish your IOLTA account, and we appreciate your efforts. You will find the process of establishing an IOLTA account easier than you probably now imagine. Your IOLTA account is commonly referred to as your “trust account,” since the funds in the IOLTA account are held by you in trust for your client until fees and costs are earned and billed to the client, at which time they can then be transferred to your business account. Please work directly with your bank to establish your IOLTA account. Please fax or mail to the HSBA a copy of a voided check or deposit slip, once you have your new IOLTA account established. For more detailed information, please review below both “Complying with Rule 11” and “Notice to Financial Institution–Form 2” (which is the form you should give to your bank regarding establishing your trust account.)
Currently, nine banks participate in the Hawaii IOLTA program. These are American Savings Bank, Bank of Hawaii, cbb bank, Central Pacific Bank, First Foundation Bank, First Hawaiian Bank, Hawaii National Bank, Home Street Bank (to be purchased by Sunflower Bank in Summer 2004), and Royal Business Bank. You are free to choose any of these nine banks that you wish. Of these nine banks, five are “Prime Partner Banks,” which means these five banks remit interest to HJF at the rate of 70% of federal funds target rate without fees. These five banks are: American Savings Bank, Bank of Hawaii, Central Pacific Bank, First Hawaiian Bank, and Royal Business Bank.
For all of the IOLTA banks, all typical monthly service fees (other than special fees charged for cashier’s checks, stop payment charges, check printing fees, insufficient funds, etc.) are paid by your bank and/or Hawaii Justice Foundation (“HJF”). Each month, participating banks pay to HJF the aggregate net monthly interest from all their IOLTA accounts. HJF uses these funds for various legal services projects and related activities. All fifty states have similar programs.
Each year in November or early December, the Hawaii State Bar Association (“HSBA”) will send you a HSBA Registration Statement for the following year. Part of that registration information package will be your “IOLTA Certification,” which is a simple one-page form. To meet your IOLTA reporting requirements, you need to complete and include that form with your yearly HSBA registration. Thus, once you have the IOLTA account set up, maintenance of your IOLTA account is relatively easy. Please report to the HSBA any changes in the location of your IOLTA trust account. We wish you the very best in your practice of law, and we thank you again for your cooperation.