Supreme Court amends IOTA rule.

The Florida Supreme Court has amended Bar rules to open the IOTA program to financial institutions other than banks and require those holding the trust accounts to pay interest rates or dividends commensurate with those offered to their non-IOTA depositors.

"Not only does this amendment have the unanimous endorsement of the [Bar] Board of Governors, but nearly all of the comments received have been overwhelmingly in favor of the purpose behind the amendments," the unanimous court said in its June 14 opinion amending Rules 5-1.1(e). Case no. SC01-851.

The Florida Bar Foundation sought the amendment as a way to increase IOTA revenues by broadening the types of institutions that may participate in IOTA.

Florida Bar Foundation President A. Hamilton Cooke said the new provision has the potential to double the money generated by the IOTA program and includes language that requires any institution that wants to handle IOTA accounts to offer the same market rate of interest or dividends on products available to non-IOTA depositors with comparable balances.

"We are extremely pleased by the court's action," Cooke said. "Of course, the real beneficiaries are the individuals and families served by IOTA legal aid grantees. The Foundation will work directly with banks and savings and loan associations, which currently hold IOTA accounts, to implement the new rule.

"The Florida Banker's Association was very helpful in this whole process, and we look forward to working cooperatively with our bank and savings and loan association partners, and to a smooth transition," he added. "We also expect to meet very shortly with investment companies to familiarize them with the IOTA program and the fact that IOTA programs in several other large states have expressed interest in securing similar rule amendments."

Under the plan, the Foundation, not the lawyer, will be responsible for initiating steps to implement the new rule and for monitoring usage of banks' and financial services companies' existing products available to non-IOTA depositors, in order to determine, compliance with the IOTA rule.

In accordance with the Foundation's request, the court made the amendment effective July 14.

"However, those institutions currently holding IOTA accounts that elect to participate in IOTA under the new rule shall be provided six months to comply with the new eligibility requirements," the court said. "The Foundation shall be charged with the responsibility of determining the...