Permissibility Of State-Chartered Credit Unions Establishing IOLTA Accounts For Attorneys - Q1 1999By the Division of Banks
Massachusetts Rules of Professional Conduct, Rule 1:15 and Appendix C to the Interest On Lawyer Trust Accounts ("IOLTA") guidelines authorizes IOLTA accounts to be established in any bank, savings and loan association or credit union authorized by federal or state law to do business in Massachusetts and insured by the FDIC or similar state-insurance programs for state-chartered institutions. Mass. Gen. Laws chapter 171, section 31 authorizes a credit union to establish N.O.W. accounts. It is the position of the Division of Banks that since an IOLTA account is a specialized form of N.O.W. account, a credit union has the authority to establish IOLTA accounts. Mass. Gen. Laws chapter 171, section 30 establishes the maximum amount a member may hold in deposit accounts with a credit union. It is the position of the Division of Banks that all IOLTA accounts with a credit union are subject to the maximum deposit limitation set forth in said chapter 171, section 30.