21 CRR-NY 7000.9NY-CRR
21 CRR-NY 7000.9
21 CRR-NY 7000.9
7000.9 Interest and dividends.
(a) To be considered presumptively eligible for the deposit of IOLA funds, an IOLA account shall pay an interest or dividend rate on IOLA accounts which is not less than the highest rate available among the following types of accounts, as paid by the banking institution to its best customers on accounts maintained at that institution which are determined to be similar to its IOLA accounts:
(1) a money market account with or tied to check writing capability;
(2) a government (such as for municipal deposits) checking account;
(3) an open-end money market fund investment offered through the banking institution that is:
(i) tied to check writing capability at the institution,
(ii) and which fund is solely invested in, or fully collateralized by, U.S. Government securities; and
(iii) has total assets of at least $250,000,000; or
(4) any other interest- or dividend-paying product with or tied to check-writing capability at the institution.
(b) As alternatives to the foregoing, the institution requesting designation by the trustees of an account as eligible to accept the deposit of IOLA funds may offer:
(1) the greater of 60 percent of the Federal Funds Target Rate or one percent, paid on an interest-bearing checking account; or
(2) a yield specified by the IOLA fund, if it so chooses, which is agreed to by the financial institution and would be in effect for a period to be mutually agreed upon.
(c) The following additional provisions are applicable. As indicated by their terms, some apply only to one or some of the options set forth above.
(1) The Federal Funds Target Rate referenced in paragraph (b)(1) of this section shall be calculated as of the first day of each month.
(2) A bank may elect to offer the highest rates that it pays on government or high-yield money market accounts on another qualifying IOLA checking account, instead of actually offering such account.
(3) Institutions may elect to pay a higher interest or dividend rate than provided for in this section.
(4) All participating financial institutions shall report, in the form and manner prescribed by the IOLA fund, on the best rate paid to their best customers for each of the types of accounts they offer within the definitions specified in paragraphs (a)(1) through (4) of this section. To enable attorneys and law firms to open and maintain an IOLA account, an eligible banking institution shall, within 60 days of the effective date of these regulations and as requested thereafter, provide to the IOLA board information that demonstrates compliance with the provisions of this section.
(5) Where there is reasonable cause to believe a financial institution is willfully misrepresenting its best rate information, the IOLA fund may condition continued approval status on a finding by the institution's auditor that its certifications have been accurate.
(d) The IOLA Board shall periodically monitor the effectiveness of this standard.
21 CRR-NY 7000.9
Current through June 30, 2021
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