Governor vetoes bill addressing IOTA interest rate

Saying it perpetuates an IOTA program "of dubious constitutionality," Gov. Ron DeSantis on June 30 vetoed a bill designed to settle a dispute over the interest rate banks pay on lawyers' trust accounts.

HB 893, sponsored by Republican Sen. Erin Grall, a Ft. Pierce attorney, and Republican Rep. Traci Koster, a Tampa lawyer, cleared both chambers unanimously.

In his veto message, DeSantis questioned the Supreme Court's authority to implement the IOTA program, which was established in 1978 and launched in 1981, saying while the court's "usurpation of regulatory authority" predates the current composition of the court, "we should not perpetuate the errors of the past."

Gov. DeSantis said that although the court has long attempted to justify the IOTA program by reference to the use of funds for legal aid to the poor, HB 893 “disclaims any such limitation.”

"Instead, it authorizes the use of interest earned on client funds 'for such other purposes' that the Supreme Court may authorize. This improperly delegates regulatory authority to the Judicial Branch and raises various other concerns, including that it allows the Court (through the entity it has established to distribute IOTA earnings) to compel 'support of certain viewpoints' with which the clients who own the IOTA funds may disagree," DeSantis said, citing U.S. Supreme Court Justice Anthony Kennedy's dissent in Brown v. Legal Foundation of Washington, 538 U.S. 216, 253 (2003).

Acting June 4 in Case No. SC2025-1730, the court amended Rule Regulating The Florida Bar 5-1.1 to require participating financial institutions to pay a specified rate tied to the Wall Street Journal Prime Rate on IOTA accounts. In adopting the amendment, the court noted: "With this change, the interest rate provision in the rule would match recently enacted legislation on the same subject, see Fla. HB 893 (2026)." Gov. DeSantis has since vetoed that legislation, but the Bar rule remains in effect.