Foundation asks court to amend IOTA rule

first_imgFoundation asks court to amend IOTA rule Mark D. Killian Managing Editor The Florida Bar Foundation will seek a rule change that would throw 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. That, according to Foundation board member Kathy McLeroy who chaired the ad hoc committee studying the proposed change has the potential to double the money generated by the IOTA program. McLeroy said if the rule changes are adopted it would “allow us to be treated as similarly situated bank customers would be treated and, therefore, increase IOTA revenue to what I understand could be in the neighborhood of $26 million.” Meeting recently on Amelia Island, the Foundation board voted without dissent to ask the Supreme Court to amend the IOTA rule to allow financial services companies such as Morgan Stanley Dean Witter or Merrill Lynch to hold IOTA accounts. The change also would require 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. Authorized investments would include FDIC insured accounts, daily bank repurchase agreements (REPOS) or appropriate safe- guarded investment products such as money market accounts, money market funds or mutual funds. Currently, IOTA funds can only be held in federally insured checking accounts or REPOs. “I think this is a big step for this Foundation to take,” said Foundation President Hamilton Cooke, noting that currently most banks do not offer the same products to lawyers’ IOTA accounts as they do to other large customers. In short, said Foundation Executive Director Jane Curran, banks generally are not treating lawyers’ IOTA funds the same as other customers who might take their business to a bank paying higher interest rates. Curran also said the Foundation recognizes there is no broad consumer demand for higher checking account rates, which is why the Foundation obtained Supreme Court approval for REPOs. “Unfortunately, only two major Florida banks SunTrust and AmSouth have agreed to offer, on a limited basis, REPOs to law firms with large IOTA accounts,” Curran said. In tailoring the proposed change, McLeroy said the Foundation worked to put the onus of meeting the new standards on the financial institutions and not the lawyers. Cooke said the Foundation will now have to put together an education plan and strategy to get the changes adopted. “Obviously there are going to be road blocks,” Cooke told the board. “Bankers, we are probably going to hear from them, and we are probably going to hear from some lawyers.” Under the current program, total IOTA revenue will amount to about $11.1 million this year, and has been steadily falling since the mid-1990s as interest rates have waned. At its peak, IOTA was generating about $19 million a year for legal aid, administration of justice and law school assistance programs. Board member Bill Davis of Tallahassee said it’s a good idea to require banks wanting to hold IOTA accounts to provide market interest rates. “I can’t help but think that IOTA accounts are being discriminated against in the market place by some banks,” Davis said. “I think this rule is really what attorneys have been asking for,” said board member Drew O’Malley of Tampa, noting lawyers are reluctant to “beg” their banks for higher IOTA rates. “This rule takes the lawyer out of the equation.” Several lawyers on the board agreed that attorneys are often not willing to push banks to increase their IOTA interest rates because it would jeopardize side business relationships they have with their banks. Bill Thompson said one of the “great aspects” of the rule is it will create some competition for IOTA accounts. Thompson also said as the Foundation drafts the proposed rule for the court’s consideration, the board must keep in mind the large number of small-firm lawyers to make sure they are not burdened by the changes. “We tried to make it so there would be very little impact on the lawyers themselves,” McLeroy said, adding that allowing IOTA accounts of any size to be opened at eligible financial services companies was made in response to the Supreme Court’s directive that the Foundation continue to investigate alternative investment opportunities that would accomplish the dual goals of increasing IOTA revenues and safeguarding trust funds. “That is something the Supreme Court had asked us to consider a number of years ago and we think is significant in this proposal,” McLeroy said McLeroy said requiring that IOTA accounts earn the highest interest rate available to non-IOTA depositors with comparable balances at the same bank or financial services company would make IOTA voluntary for institutions. And by meeting the standard, banks would become eligible for participation, and lawyers and firms would be required to deposit IOTA funds only in eligible institutions, she said. As part of the plan, McLeroy said the Foundation also will independently work with banks and financial services companies to develop appropriate products which are in compliance with the IOTA rule. McLeroy said that will include providing them computer and technical support needed to remit IOTA earnings to the Foundation and conduct the required reporting. McLeroy said the Foundation, not the lawyer, will be responsible for monitoring usage of banks’ and financial services companies’ existing products available to non-IOTA depositors, with respect to rates being paid on individual attorney and law firm IOTA accounts as reported by the Foundation on IOTA remittance reports, in order to determine compliance with the IOTA rule. The proposal calls for no action to be required of law firms by the proposed amendments to monitor their institution’s compliance and unless and until an attorney’s or law firm’s bank becomes ineligible to hold IOTA funds because of its unwillingness to offer products in compliance with the rule. In that instance, the Foundation would advise the attorney or law firm that their financial institution had become ineligible to hold IOTA funds. “However, in the event a bank is in compliance with the comparable interest rate or dividend provisions of the rule, but is unwilling to remit interest directly to the Foundation, in order to accommodate law firms, the firm would be permitted to maintain their account where it was situated and remit directly to the Foundation rather than be forced to change institutions,” McLeroy said. McLeroy said the proposed IOTA rule changes provide that IOTA funds are as safe or safer than in the current IOTA rule. For example, if not FDIC insured or in the currently-approved REPOs, which are collateralized by U.S. government notes, bonds or agency debt, then the Foundation would indemnify attorneys and law firms. That would provide, in a sense, “deposit insurance” against market loss of client funds held, for example, in government money market funds. The Foundation would purchase private insurance to cover the cost of such indemnification, if any. Foundation asks court to amend IOTA rule February 15, 2001 Managing Editor Regular Newslast_img read more

MESSENGERS OF PEACE

first_imgThe paradox of Ebola epidemic started from onset of the disease outbreak in Liberia. First was the denial. The International medical humanitarian organization Medicine Sans Frontieres (MSF) warned of its devastation and cried for action, very few, took notice.Fear, anxiety and the slow response from Government and the International community were paradoxes ’in the prevention and control of Ebola. Finally, the paradox of Ebola Virus Disease could best be explained by its mode of transmission. Most Liberians lost their lives because of their compassion, love and care for humanity.  Today, we notice the efforts put in place to control Ebola, the disappointment of every Liberia when a new case was identified. No longer are we in the era of denial, fear and anxiety. Control and prevention effort is now placed on stopping stigma and discrimination of Ebola survivors, educating the public about the danger of complacency and ensuring the total eradication of EVD from Liberia.To declare Liberia free of Ebola, we need to identify every person that came in contact with the last positive case and place them in quarantine. The contact tracing programme has to be enhanced.As we seek to implement lessons learned in our fight to defeat Ebola in future outbreak, we urge Government and the International community to focus on reducing the factors that contributed in the first place to the high Ebola mortality.The challenges ahead and the difficult choices that we need to make in the absence of established treatment for Ebola further explain the paradox of Ebola Virus Disease. While a large number of children orphaned by the Ebola virus now receive housing, education and other form of welfare, the country still has to deal with accounting for the huge amount of funds spent to control EVD.There is an urgent need for transparency and the sharing of information as well as data. The need for greater coalition, collaboration and coordination cannot be over-emphasized. We have come a long way and therefore need to remain on course.The Ebola outbreak is not over until there are zero cases in the entire country for 42 days. We should be constantly reminded that our neighboring countries of Sierra Leone and Guinea are not out of the wood yet.  According to Margaret Harris, “No one can make any specific predictions on when the Ebola outbreak will be over” Therefore, the control of our porous borders (Land frontiers must be a priority. The road to safety is long but the destination to an Ebola free country can be reached.To ensure that we are totally free, we need to wake people up and put in place permanent systems. We also need to educate our children through the stories and information we provide them with.Support the “Ebola Educates” Campaign in kind through your stories or with your generous cash donation.Until next week, when we come to you with another article on: “Ebola Educates- Placing emphasis on Human Social Security”, Peace First, Peace above all else, May Peace prevail on earth.Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)last_img read more