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An effort to get banks to raise interest rates and/or drop service charges on trust accounts in which lawyers hold clients’ money has increased funding for legal services for low-income Texans in civil matters by about $130,000 so far this year, the Texas Equal Access to Justice Foundation reports. Joyce Lindsey, TEAJF associate director, says Interest on Lawyers’ Trust Accounts deposits generated about $5.3 million to provide legal assistance to the poor last year. That’s a far cry from the $9.7 million in income that Lindsey says the IOLTA accounts produced in 1991, when interest rates were higher than they have been in recent years. But the interest revenue is up from 1996, when only $4.9 million was produced, she says. Established by the state supreme court in 1984, the Texas IOLTA Program enables the interest from the pooled accounts to be used to support free legal services for low-income citizens. Grants are awarded annually to nonprofit organizations that provide the services to eligible clients in noncriminal matters. TEAJF reports that it helped fund more than 40 such organizations in 1999, the most recent year for which complete information on grant awards is available. More than 139,000 individuals received assistance with family, employment, disability, housing and other legal problems during that year, Lindsey says. “Those who are helped by IOLTA are really our neighbors, our friends,” says El Paso lawyer John Jones, chairman of the State Bar of Texas Standing Committee on Legal Services to the Poor in Civil Matters. Since the IOLTA Program depends on interest rates to generate revenue, the foundation decided to ask bankers for help. Lindsey says the campaign was kicked off in November when about 600 letters were sent to banks, urging them to “Go for IOLTA Gold.” The banks were told they could qualify for the “gold” level on the program’s honor roll by paying at least 2.5 percent in interest on all IOLTA accounts. Banks paying a net yield of between 2 percent and 2.49 percent on IOLTA accounts will be on the “silver” level, and those with rates ranging from 1.5 percent to 1.99 percent will achieve bronze status. “The statewide average rate paid is approximately 1 percent,” Lindsey says. Lindsey says that 59 banks throughout the state pay rates at the “gold” level — including 23 that increased their rates to achieve gold status. “That $130,000 increase is coming from 23 banks,” Lindsey says, noting that the amount could go up if other financial institutions join in the effort. Jones, a shareholder in Delgado, Acosta, Braden & Jones, raised more than $33,000, according to TEAJF. He says that State National Bank and Bank of the West, both located in El Paso, agreed to increase their rates from 1 percent to 2.5 percent and that another El Paso bank is expected to follow suit. “It hasn’t been that hard. The first two [banks] signed on after a phone call and a letter,” Jones says. “When you just explain to them how it benefits our state, who gets the help, it hasn’t been a hard sell.” Jefferson State Bank in San Antonio has agreed to raise its rates from 1 percent to 2.5 percent on IOLTA accounts and has eliminated service charges on those accounts, Lindsey says. “We are a community bank and we want to help the community as much as we can,” says Bill Goetz, vice president and chief financial officer at Jefferson State. Helping the IOLTA program is a way to help those in the community who need legal services, Goetz says. Lindsey says dropping service charges on IOLTA accounts is a big help. Paying service charges reduced the income generated by the accounts by about $1.7 million in 1999, and the charges are expected to take an even bigger bite from the 2000 income, she says, adding that the books on last year haven’t been closed out yet. “I think in 2000 it’s going to be close to $1.8 million,” Lindsey says. TEAJF has encouraged local bar associations to recognize the banks in their communities that make the IOLTA honor roll. So far, approximately 300 banks have earned a spot — gold, silver or bronze level — on the IOLTA honor roll, Lindsey says. Most of them are independent banks, not ones that operate statewide, she says.

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