Access to Justice

Legal aid programs likely to be hard hit by drop in IOLTA funds, group warns

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The National Association of IOLTA Programs is sounding the alarm about an expected drop in funds from Interest on Lawyer Trust Accounts and other sources that support legal aid programs.

In a March 31 press release, the group said funding from the IOLTA, state court filings fees and legislative appropriations is likely to plummet far below the $370 million generated in 2018.

IOLTA funding rises with higher interest rates. But the Federal Reserve has cut interest rates to low levels that were typical of the 2008 financial downturn. In addition, court filing fees that support legal aid programs in many states are plunging because of court closures.

Members of the National Association of IOLTA Programs predict that their revenues will drop by as much as 75% over the next year. The funding problems are occurring just as the need for legal help will be peaking.

Although Congress appropriated $50 million in additional funds for the Legal Services Corp. in the coronavirus stimulus bill, “this influx will fall short of what is needed,” the press release says.

Legal aid programs receive only part of their funding from the LSC. In most states, the IOLTA and related funds support a significant number of legal aid and pro bono programs.

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