For new IOLTA accounts, we believe you may choose to pay an interest rate that is equal to the highest interest rate or dividend available to your non-IOLTA account customers.

However, for your existing IOLTA accounts, we recommend reviewing your account terms to determine whether you have the flexibility to change the safe harbor rate (which is 1% or a yield equal to 70% of the Federal Funds Target Rate, whichever is higher) to a new rate. If your account terms do not provide such flexibility, we believe you would need your IOLTA customers’ consent to change an agreed upon interest rate.

For resources related to our guidance, please see:

• Illinois Supreme Court Rule 1.15(f)(2) (“Eligible institutions shall maintain IOLTA accounts that pay the highest interest rate or dividend available from the institution to its non-IOLTA account customers when IOLTA accounts meet or exceed the same minimum balance or other account eligibility guidelines, if any. In determining the highest interest rate or dividend generally available from the institution to its non-IOLTA accounts, eligible institutions may consider factors, in addition to the IOLTA account balance, customarily considered by the institution when setting interest rates or dividends for its customers, provided that such factors do not discriminate between IOLTA accounts and accounts of non-IOLTA customers, and that these factors do not include that the account is an IOLTA account.”)

• Illinois Supreme Court Rule 1.15(f)(3) (“An IOLTA account that meets the highest comparable rate or dividend standard set forth in paragraph (f)(2) must use one of the identified account options as an IOLTA account, or pay the equivalent yield on an existing IOLTA account in lieu of using the highest-yield bank product . . .”)

• Illinois Supreme Court Rule 1.15(f)(4) (“As an alternative to the account options in paragraph (f)(3), the financial institution may pay a ‘safe harbor’ yield equal to 70% of the Federal Funds Target Rate or 1.0%, whichever is higher.”)