In 2023, the Florida Supreme Court issued an order on the Rules Regulating the Florida Bar in regards to Interest On Trust Accounts (IOTAs). Pursuant to the 2023 IOTA Amendment, lawyers must maintain their trust accounts in institutions that pay a particular rate. If the rule is not changed, its enforcement will lead to financial disruption for law firms in managing their trust accounts and seeking bank services. Banks, particularly many community banks, will either stop serving their legal customers' needs or be forced to strategize how this new cost will be paid. The FBA seeks a fair and reasonable solution that will enable (1) banks to continue serving their legal clients and (2) the Bar Foundation, which receives the interest, to support Florida's legal aid needs. Read the background on this issue.
The FBA filed a Motion for Rehearing with the Court, which was granted; the Court then required that the Florida Bar Foundation report on the implementation of the new rule. Following that report, the Court allowed any interested party to comment on the new rule. FBA submitted a response and combined exhibit of almost 30 banks and over 200 lawyers opposing the new rule. CFO Jimmy Patronis and the Florida Chamber of Commerce also submitted comments opposing the new rule. The decision is now pending with the Court.
While Court considers the issue, we have pursued a legislative fix as another path to resolving this untenable situation. Senator Erin Grall (R-Vero Beach) and Representative Robert Brackett (R-Vero Beach) introduced SB 1336 and HB 1253, respectively, legislation that would reform Florida's current IOTA program. The bills seek to provide a more appropriate index and interest rate rather than the 2023 rule, which inappropriately based the rate on the Prime Index. Whether through the court or through the legislature, this issue must be addressed to sustain the IOTA program and maintain banking services for legal clients in Florida.