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GOVERNOR SPITZER ANNOUNCES CITIBANK TO JOIN IN STATE EFFORT TO INCREASE FUNDING FOR CIVIL LEGAL SERVICES FOR LOW-INCOME NEW YORKER

Governor Eliot Spitzer today appeared with state and local officials, as well as legal service providers at the Bronx offices of one of New York City’s largest non-profit providers of civil legal services for the poor, to announce that Citibank has agreed to participate in an expansion of the Interest on Lawyers Account (IOLA) program. The program will provide dramatically increased funding for civil legal services for low income New Yorkers.

“I am pleased that Citibank has generously agreed to support our efforts to provide millions of low-income working New Yorkers with important legal services that can play an important role in safeguarding their economic security,” said Governor Spitzer. “Through this effort we are funding civil legal services like never before and enabling important legal representation and support for people who are struggling to access health care, fight domestic abuse and discrimination, and prevent homelessness.”

Since 1983, the accumulated interest on IOLA accounts has been used to help fund not-for profit programs that provide civil legal services to millions of low-income New Yorkers. Prior to the change, the top 80 banks handling IOLA funds paid an average interest rate of far less than 1 percent. Under the new regulations, each bank will be required to pay competitive interest rates on IOLA accounts comparable to those paid by that bank on similar accounts. The new regulations will significantly increase the interest banks pay on the roughly $3.1 billion in escrow accounts lawyers use to hold clients’ funds and increase the IOLA fund’s grant-making to as much as $60 million per year from approximately $14 million in 2007. Citibank and JP Morgan Chase are the two largest holders of IOLA deposits.

Senator Jose Serrano said: “The lawyers who ensure people’s access to the legal system are a great asset to our community, and the extraordinary increase in resources for this purpose will be especially valuable in the Bronx.”

Assemblywoman Helene Weinstein, chair of the Assembly Judiciary Committee said: “For more than a decade the Assembly has stood alone in the struggle to ensure access to critical legal services for low income New Yorkers. I welcome Gov. Spitzer's leadership and his partnership in these efforts. Liberty and justice for all, only has meaning if all New Yorkers have access to lawyers and courts. The new IOLA regulations help bring us closer to this goal.”

Managing Director at Citibank, Hugh Donlon, said: “We are pleased to join Governor Spitzer in announcing that we have reached agreement with the IOLA Fund regarding this important initiative, which will greatly increase the amount of funds available for legal aid services for indigent clients, truly a worthy cause.”

Edwin Lopez-Soto, newly appointed chair of the IOLA Board of Trustees, said: “Each participating bank’s payment toward the fund for civil legal assistance for poor New Yorkers will increase significantly. We worked closely with the Governor, the banking community, bar association leaders and legal services providers to take this important step to increase access to our civil justice system.”

To date, IOLA has provided more than $228 million to providers of civil legal services to low-income New Yorkers.

The regulation changes were proposed May 31, and adopted following a public comment period.

Governor Eliot Spitzer was joined at today’s event by Senator Jose Serrano, Assemblywoman Helene Weinstein, Assemblywoman Carmen Arroyo, Council Member Maria del Carmen Arroyo and IOLA Board of Trustees Chair Edwin Lopez-Soto.

Earlier this week, Governor Spitzer laid out his economic security agenda to help low-income working New Yorkers achieve financial security by reducing New York’s high cost of living, establishing educational and job training opportunities and improving services. As part of these efforts, he conducted an economic development tour of the Bronx with ESDC and local economic development officials and signed the Shelter Allowance bill to maintain affordability and improve services for renters.