Texas: New IOLTA Rule To Increase Funds for Legal Aid
Thursday, August 16, 2007
- Organization: Legal Service Corporation News
- Source: CALegalAdvocates > CALegalAdvocates.org
The Texas Supreme Court has approved a rule requiring attorneys to place their client trust accounts in "eligible" banks--banks that pay interest rates on these accounts comparable to other accounts of similar size.
Interest earned from IOLTA accounts is collected by the Texas Equal Access to Justice Foundation (TEAJF) and distributed to legal aid programs, including the LSC-funded Legal Aid of NorthWest Texas, Lone Star Legal Aid, and Texas RioGrande Legal Aid. In 2006, these programs received a total of $1.2 million in IOLTA revenue.
According to the TEAJF, the more than 20,000 client trust accounts in Texas earn about $4 to $6 million annually--revenue that could double or triple under the new rule, which applies to more than 500 banks in the state.
Justice Harriet O'Neill, a member of the Texas Supreme Court and liaison to the TEAJF said, "Legal aid organizations turn away half of all qualified applicants due to a lack of resources. The new IOLTA rule will help bridge the gap by increasing IOLTA revenue, thus increasing funding for legal aid programs. I applaud the financial institutions that have opted to participate in the IOLTA program."