Bankers seek reasonable solution on IOTA issue to avoid disruption

Florida’s bankers are in a challenging situation. Every day, we work closely with our clients to provide high quality service, fair rates and confidence in the safety of their money. In addition to Florida’s growing population and our dynamic business community, some of our best clients are lawyers and their law firms.

Banks provide a unique type of account to law firms, called IOTA (interest on trust accounts). Law firms often have one designated IOTA that holds the settlement money for their clients. These accounts work like checking accounts, because the amount of money held in a law firm’s IOTA fluctuates and does not stay in the account for an extended period of time, unlike a savings or money market account. The IOTA program allows these IOTAs to accrue interest, so banks pay for the privilege of holding and servicing that money – just like we do on your checking or savings account. 

In 1981, the Florida Supreme Court approved the implementation of Florida’s IOTA program, the first in the United States. The program was designed so that the interest banks pay on these accounts doesn’t benefit the law firms that own the account or the law firm’s clients. Instead, banks pay the interest to The Florida Bar Foundation, now called Funding Florida Legal Aid, in order to provide funding for important legal services for those in need. We’re proud of the impact that banks have made by providing funding for this important initiative in the State of Florida.