Frequently Asked Questions 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.
The statute applies to those settlement agents as defined in the Good Funds Settlement Act who handle closings for “real estate transactions involving a one‑to four‑family residential dwelling or a lot restricted to residential use” in North Carolina.
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.
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).
Only settlement agents who are attorneys licensed in North Carolina must file the State Bar’s bank directive with the bank where they maintain their trust account.
Yes, all settlement agents should use the Status Update Form to notify NC IOLTA of the opening or closing of IOLTA accounts. Only settlement agents who are attorneys licensed in North Carolina need to provide a State Bar ID number.