The New York Bar Foundation Joins Opposition to the Diversion of IOLA Funds

The New York Bar Foundation joins New York State Bar Association President Richard Lewis and the IOLA Board of Trustees in their strong opposition to Gov. Kathy Hochul’s last minute proposal to ‘sweep’ $55 million from the Interest on Lawyers Account Fund (IOLA) to the General Budget. This amount represents a substantial portion of the fund, which was specifically established to provide exclusive support for civil legal services to low-income New Yorkers.

Since its inception in 1950, the New York Bar Foundation has been providing grants for civil legal services. Foundation President Carla Palumbo, CEO of the Legal Aid Society of Rochester, said, “The need to continue to support civil legal services is critical. The Foundation receives more than $1M in grant requests on an annual basis and these requests continue to increase.”

The New York Bar Foundation does not receive IOLA funds; instead, we award grants to non-profit legal services organizations throughout New York State through our fundraising efforts and donations. “Our program is small compared to IOLA but we recognize the significance of that program and the role it plays in helping the most vulnerable New Yorkers. To reallocate or reduce any of this funding would have a draconian impact on legal services providers. Diverting these funds at the 11th hour will have a tremendous negative impact on the IOLA program and the organizations that rely on its crucial funding.”

Lucia Whisenand, Chair of the Foundation’s Grants Review Committee, added, “Inflation, rising housing and grocery costs, and the influx of asylum seekers are already adding to an overburdened system. It cannot sustain a loss of $55 million.” The diverted funds do not come from taxpayer funds, but from attorney IOLA accounts. This diversion might have a negative impact on attorneys’ decisions to maintain IOLA accounts in the future, thus further undermining efforts to provide funding for civil legal services.