Banking on IOLTA

Capitol One is the newest member of the Texas Access to Justice Foundation’s Prime Partner Bank program, bolstering one TAJF official’s hopes of raising more money to provide civil legal services for low-income Texans. Betty Balli Torres, TAJF’s executive director, says the decline in interest rates from 5.25 percent to 2 percent since September 2007 has cut funding for pro bono services available this year through the Interest on Lawyer’s Trust Accounts program.  “We had anticipated $28 million,” Torres says. “Instead, it’s going to be closer to $12 million.” Torres says the financial institutions that participate in the Prime Partners program pledge to pay a net yield of 70 percent of the Federal Funds Target Rate on IOLTA accounts.  Under the IOLTA rules the Texas Supreme Court adopted last year, banks are required to pay only 60 percent of the current 2 percent federal rate, Torres says. Since June 2007, the Prime Partners program -- which now includes 31 banks – has generated about $450,000 for IOLTA, she says.  The addition of Capital One is significant, Torres says, because many of the other banks in the program are small institutions.  “Capital One is huge,” she says.
-- Mary Alice Robbins