FAQs for Settlement Agents

An amendment to the Good Funds Settlement Act (N.C. Gen. Stat. § 45A-9) requires that interest bearing accounts of settlement agents handling closing and loan funds be set up as IOLTA accounts. This requirement took effect on January 1, 2012.

Who are the affected settlement agents?
Is it mandatory for settlement agents to establish or maintain an IOLTA account?

The statute requires that interest bearing trust or escrow accounts holding funds related to North Carolina transactions be set up as NC IOLTA accounts remitting interest to the IOLTA program at the NC State Bar. It does not require that agents set up or maintain an interest bearing account.
May a settlement agent’s IOLTA account be maintained at an out of state bank?

The State Bar has said that banks that do not have a brick-and-mortar branch in NC may hold settlement agent accounts despite the lawyers’ professional responsibility rule that requires an in-state branch (though the banks not currently on our Eligible Bank list will need to communicate with NC IOLTA so that we can ensure they are in compliance with NC IOLTA policies).
Must the NC State Bar’s bank directive be on file for a settlement agent’s NC IOLTA account?
How should settlement agents – including nonlawyers – notify NC IOLTA of the opening or closing of IOLTA accounts?