AB 1723, c. 422 of 2007
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AB 1723, c. 422: IOLTA accounts.
Revises the laws governing Interest on Lawyer Trust Accounts (IOLTA accounts) and requires attorney and law firms to deposit or invest their IOLTA accounts, as newly defined, in financial institutions that offer high yielding interest or dividend accounts.
The source of this bill is the State Bar of California. The long list of supporters include the Attorney General, Judicial Council of California, Disability Rights Education Defense Fund, Los Angeles County Bar Association, Youth Law Center, and over 50 law firm partners, presidents and genearl counsel of various California businesses.
The State Bar stated, in part, regarding support for its bill that: "AB 1723 would modernize statutes related to Interest on Lawyer Trust Accounts (IOLTA) by expanding the types of accounts in which IOLTA funds may be deposited. Under current law, only eligible financial institutions may hold IOLTA accounts, and those accounts are limited to standard interest-bearing checking accounts. The bill would permit eligible financial institutions to offer both deposit and investment IOLTA accounts, and to charge appropriate fees for such accounts. The bill also would provide that eligible financial institutions may maintain existing deposit accounts that meet certain eligibility requirements but pay rates on those accounts that would be earned if those funds were instead in investment accounts. As is current law, attorneys would be permitted to place IOLTA funds in eligible institutions. . . ."
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