Texas Politics – Interest rate decline hits legal aid providers hard

Texas has underfunded civil legal services to the poor for decades — eight out of 10 of those eligible for help are unserved.

And it looks even worse for the coming years because the drop in interest rates has dried up a key funding source. The program is called IOLTA (for interest on lawyers’ trust accounts). It captures the interest generated by pooled client funds held short-term by law firms. After raising $20 million in 2007, the program is expected to drop to $1.5 million this year.

And the funding drop couldn’t be coming at a worse time. Legal aid demand in Houston has skyrocketed as victims of Hurricane Ike try to deal with FEMA and other government benefits. The housing crisis also is driving demand around the state for legal services. Family cases, including many involving domestic violence, accounted for about half of the 108,000 legal aid cases closed in 2007.

To read the entire blog, click here.

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