California State Bar says it is working to grow fund that provides legal aid grants

By Keri Carbaugh | Feb 21, 2019

SAN FRANCISCO – The California State Bar is pushing efforts to increase interest rates on the Interest on Lawyers’ Trust Accounts (IOLTA), a fund that helps in part to provide legal aid grants.

Those efforts are expected help interest earned on the accounts reach record highs this year, the California State Bar said in a Feb. 20 release. Over half of the state bar’s legal aid grant funds came from IOLTA in the last 35 years.

“Our staff’s work to increase interest rates on IOLTA accounts is a great example of how we are doubling down on our mission of access, diversity, and inclusion, even in a time of great financial challenge,” state bar Executive Director Leah T. Wilson said in the release. “This work will result in a 450 percent increase in IOLTA revenue over two years.”

The funds received by the state bar come from pooled attorney bank accounts with nominal and short-term client funds. Since 2008, interest rates, which effect IOLTA’s revenue, have been at all time lows in banks which pay IOLTA interest rates comparable to other places, the release said. 

Last year the state bar began efforts to recertify financial institutions that offer IOLTA accounts to ensure that the interest rates comply with state bar requirements, the release said. This year, the projected funds will grow to $39 million, up from $19 million last year, the release said.

These funds plus the  state’s General Fund, court filing fees and outside contributions will be distributed throughout California by the state bar to over 100 nonprofit, legal services organizations in the form of grants to pay for free legal services to low-income Californians, the release said. These organizations include Asian Americans Advancing Justice of San Francisco, Affordable Housing Advocates in San Diego, Bay Area Legal Aid in Oakland and the San Luis Obispo Legal Assistance Foundation.  

Despite the increase in funding, there is still a large amount needed to support all low-income Californians in need of legal aid. For the first time, the state bar’s California Justice Gap Study will try to find out the exact amount needed to help close the gap, the release said.

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