Friday, September 26, 2014

LTF provides update on Northern Trust IOLTA conversions

The original deadline set by the Northern Trust for lawyers (or at least those lawyers who don't have $2 million that they can leave on deposit with the bank at all times) to move their IOLTA accounts is rapidly approaching.

Thankfully, the Northern Trust -- which for decades catered to lawyers and sought their business -- has not forgotten everything it learned in its years of dealing with the legal profession. The bank apparently realizes that, to many of us, a "deadline" means it is time to begin paying attention....

David Holtermann, General Counsel of the Lawyers Trust Fund of Illinois, has written FWIW to advise that the Northern Trust has granted, if not a reprieve, at least a temporary stay of execution, if affected lawyers act promptly. A new page, explaining the outcome of recent discussions between the Lawyers Trust Fund and the bank has been posted at the LTF website. Here's an excerpt:
The bank informed LTF that it has some leeway to accommodate lawyers who have not been able to move their IOLTA accounts to other financial institutions in advance of the October 3 deadline. Lawyers who need additional time should contact the bank directly.

Northern Trust also explained that its actions to curtail the IOLTA accounts of many customers are driven by its business decision to become a “wholesale bank.” Regulations related to that status require the bank to target its services away from the retail banking sector that encompasses many IOLTA accounts, even many with sizeable deposits. Although Lawyers Trust Fund regrets the disruption this has caused for many lawyers, LTF does not believe Northern Trust is targeting IOLTA accounts.

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