Can a lawyer use a debit card tied to the IOLTA trust account to pay a court filing fee electronically?

Plain-English summary

A court required filing fees to be paid electronically. The client paid the lawyer the fee amount, which the lawyer deposited into her IOLTA account, and the lawyer asked whether she could pay the filing fee from the trust account using a debit card. The committee answered yes, conditioned on the lawyer not withdrawing IOLTA funds as cash with the card, taking appropriate precautions to safeguard the card against misuse, ensuring the client has sufficient funds to cover the charge, and maintaining records of all debit-card transactions under RPC 1.15B.

The committee reasoned that RPC 1.15A(h)(5) allows trust-account withdrawals only by check or bank transfer, each to a named payee. Using a debit card to pay a filing fee directly transfers funds from the trust account to the recipient's account (the court), so it qualifies as a bank transfer to a named payee. By contrast, using the card to withdraw cash at an ATM has no named payee and cannot be documented for record-keeping under RPC 1.15B, so it is not a bank transfer and is not permitted. The committee advised safeguarding the card and PIN to prevent cash withdrawals, noted that because RPC 1.15B record-keeping applies the card would ordinarily be used only in the lawyer's office, and required confirming sufficient client funds before use, including for any court transaction fee, citing RPC 1.15A(h)(8) (disbursements for a client may not exceed that client's funds on deposit).

In practice

Under the Washington rules as they stood at the time of the opinion, the committee treated a direct debit-card payment to a court as a permitted bank transfer to a named payee under RPC 1.15A(h)(5), while flatly prohibiting any cash withdrawal from the trust account via the card. The opinion holds that a lawyer using such a card must safeguard it and its PIN, keep RPC 1.15B records of every transaction (which practically confines use to the office), and verify before each use that the specific client has enough on deposit to cover the filing fee and any transaction fee, since RPC 1.15A(h)(8) bars disbursing more than a client's own funds.

Common questions

Q: Can a lawyer pay a court filing fee with a debit card linked to the IOLTA account?

A: Yes. The committee concluded a direct debit-card payment to the court is a bank transfer to a named payee permitted under RPC 1.15A(h)(5), subject to the safeguards it listed.

Q: Can the lawyer use the trust-account card to get cash?

A: No. The committee said withdrawing cash at an ATM has no named payee and cannot be documented under RPC 1.15B, so it is not a permitted bank transfer under RPC 1.15A(h)(5).

Q: What must the lawyer check before charging the card?

A: That the specific client has sufficient funds in trust to cover the full charge, including any court transaction fee, because RPC 1.15A(h)(8) bars disbursing on a client's behalf more than that client's funds on deposit.

Q: What records are required?

A: The lawyer must keep records of all debit-card transactions as required by RPC 1.15B, which is why the committee said the card would ordinarily be used only in the lawyer's office.

Background and rules framework

The opinion interpreted Washington RPC 1.15A(h)(5) (Model Rule 1.15, withdrawals from trust by check or bank transfer to a named payee), RPC 1.15A(h)(8) (disbursements limited to a client's funds on deposit), and RPC 1.15B (required trust-account records). It classified a direct debit-card payment as a bank transfer while treating an ATM cash withdrawal as impermissible.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.15 / Washington RPC 1.15A(h)(5) (withdrawals by check or bank transfer to a named payee)
• Washington RPC 1.15A(h)(8) (disbursements limited to the client's funds on deposit)
• Washington RPC 1.15B (trust-account record-keeping)

See also

• WA Ethics Op. 2196: client trust funds in a CDARS certificate of deposit
• WA Ethics Op. 2177: withdrawing earned fees from trust on billing

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1659

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Opinion: 2210
Year Issued: 2012
RPC(s): RPC 1.15B, 1.15A(h)(5), 1.15A(h)(8)
Subject: Using Trust Account Debit Card for Payment of Filing Fees

This opinion addresses the payment of filing fees using an electronic debit card issued with the lawyer’s trust account.

Question: A court requires that filing fees be paid electronically. The client pays the lawyer the amount of the filing fee, which the lawyer deposits into her IOLTA account. May the lawyer pay the filing fee from the trust account using a debit card?

Answer: Yes, PROVIDED that the lawyer does not withdraw funds from the IOLTA account as cash using the debit card, takes appropriate precautions to safeguard the card to prevent misuse, ensures that the client has sufficient funds to pay the amount charged, and maintains records of all debit card transactions in accordance with RPC 1.15B.

Analysis: Lawyers may withdraw funds from a trust account only by check or bank transfer, and all withdrawals must be made to a named payee. RPC 1.15A(h)(5). The Rules do not define “bank transfer.”

As a technical matter when a debit card is used to pay a filing fee, funds are transferred from the bank account associated with the debit card (here, the lawyer’s trust account) to the bank account for the recipient of the filing fee, such as the court. Use of a debit card to pay a filing fee directly is therefore a bank transfer under RPC 1.15A(h)(5).

On the other hand, RPC 1.15A(h)(5) prohibits use of the debit card to withdraw funds from an ATM as cash. These transactions do not include a named payee. They also cannot be documented for record keeping purposes pursuant to RPC 1.15B. Because such a withdrawal is not a bank transfer, it is not permitted under RPC 1.15A(h)(5).

Lawyers who obtain debit cards for their trust accounts should adequately safeguard the card and its PIN (personal identification number) to prevent cash withdrawals. Because a lawyer must keep records of debit card transactions as required by RPC 1.15B, ordinarily the card would only be used in the lawyer’s office. Before using a debit card, the lawyer must confirm that the client has sufficient funds in the trust account to pay the full amount that will be charged. If the court charges a transaction fee, the lawyer must have sufficient funds for that client to pay the transaction fee as well as the filing fee. See RPC 1.15A(h)(8) (disbursements on behalf of a client may not exceed the funds of that person on deposit).