Interest on Lawyer Account

Mission

The Interest on Lawyer Account (IOLA) Fund was established in 1983 to finance civil indigent legal services. Revenues are derived from the interest earned on small trust accounts in which attorneys hold certain funds for their clients. Banks transfer the interest earned on these escrow accounts to the IOLA Fund to finance grants to not-for-profit, tax-exempt entities providing civil legal services to the indigent, elderly, disabled and others. Legislation enacted in 1988 made participation in IOLA mandatory for attorneys in private practice who hold nominal short term escrow accounts for clients. Regulations ensure that banking institutions pay a fair interest rate on IOLA escrow accounts; one that is not less than that paid on similar bank account types.

Organization and Staffing

The IOLA Fund is administered by a Board of Trustees who are appointed by the Governor for three-year terms. One member of the Board is appointed by the Governor to serve as Chair. The Board employs an Executive Director to serve as the Chief Administrative Officer to supervise the implementation of regulations, coordinate the review of applications, and supervise additional staff.

Major Programs

IOLA funds are distributed through five-year grants in two program areas:

Civil Legal Services (CLS) Grant. Awards are made to qualified organizations that provide civil legal services in multiple substantive areas free of charge to low-income persons in a particular geographic service area. Awards in the CLS program are for general operating support for organizations providing direct civil legal assistance to the impoverished.
Administration of Justice (AOJ) Grant. Awards are made to providers of legal services to underserved groups and other groups with special needs. In addition to legal services, this program supports training events, program innovations, alternative dispute resolution programs, volunteer lawyer programs, and technology improvements that enhance legal service delivery.

Budget Highlights

The FY 2026 Executive Budget recommends $80.9 million in appropriations ($3.4 million in State Operations, and $77.5 million in Aid to Localities) and a workforce of 11 FTEs. The $77.5 million in Aid to Localities is to implement a five-year grant cycle from FY 2026 through FY 2030, which is supported by increased revenues derived from the Fund. The $444,000 increase in State Operations will support two additional FTEs to enhance IOLA's responsiveness to stakeholders as well as continue the development of IOLA’s Justice Infrastructure Project.

For more information on this agency's budget recommendations located in the Executive Budget Briefing Book, click on the following link:

Briefing Book – General Government

ALL FUNDS
APPROPRIATIONS
(dollars)
Category	Available FY 2025	Appropriations Recommended FY 2026	Change From FY 2025	Reappropriations Recommended FY 2026
State Operations	2,916,000	3,360,000	444,000	0
Aid To Localities	117,000,000	77,500,000	(39,500,000)	48,202,000
Total	119,916,000	80,860,000	(39,056,000)	48,202,000

ALL FUND TYPES
PROJECTED LEVELS OF EMPLOYMENT BY PROGRAM
FILLED ANNUAL SALARIED POSITIONS
Program	FY 2025 Estimated FTEs 03/31/25	FY 2026 Estimated FTEs 03/31/26	FTE Change
New York Interest on Lawyer Account
Special Revenue Funds - Other	9	11	2
Total	9	11	2

STATE OPERATIONS
ALL FUNDS FINANCIAL REQUIREMENTS BY FUND TYPE
APPROPRIATIONS
(dollars)
Fund Type	Available FY 2025	Recommended FY 2026	Change
Special Revenue Funds - Other	2,916,000	3,360,000	444,000
Total	2,916,000	3,360,000	444,000

STATE OPERATIONS
ALL FUNDS FINANCIAL REQUIREMENTS BY PROGRAM
APPROPRIATIONS
(dollars)
Program	Available FY 2025	Recommended FY 2026	Change
New York Interest on Lawyer Account
Special Revenue Funds - Other	2,916,000	3,360,000	444,000
Total	2,916,000	3,360,000	444,000

STATE OPERATIONS - OTHER THAN GENERAL FUND
SUMMARY OF APPROPRIATIONS AND CHANGES
FY 2026 RECOMMENDED
(dollars)
Program	Total		Personal Service
Program	Amount	Change	Amount	Change
New York Interest on Lawyer Account	3,360,000	444,000	1,215,000	150,000
Total	3,360,000	444,000	1,215,000	150,000

STATE OPERATIONS - OTHER THAN GENERAL FUND
SUMMARY OF APPROPRIATIONS AND CHANGES
FY 2026 RECOMMENDED CONTINUED
(dollars)
Program	Nonpersonal Service
Program	Amount	Change
New York Interest on Lawyer Account	2,145,000	294,000
Total	2,145,000	294,000

AID TO LOCALITIES
ALL FUNDS FINANCIAL REQUIREMENTS BY FUND TYPE
APPROPRIATIONS
(dollars)
Fund Type	Available FY 2025	Recommended FY 2026	Change
Special Revenue Funds - Other	117,000,000	77,500,000	(39,500,000)
Total	117,000,000	77,500,000	(39,500,000)

AID TO LOCALITIES
ALL FUNDS FINANCIAL REQUIREMENTS BY PROGRAM
APPROPRIATIONS
(dollars)
Program	Available FY 2025	Recommended FY 2026	Change
HOMEOWNER PROTECTION PROGRAM
Special Revenue Funds - Other	40,000,000	0	(40,000,000)
LEGAL REP FOR EVICTION
Special Revenue Funds - Other	15,000,000	0	(15,000,000)
New York Interest on Lawyer Account
Special Revenue Funds - Other	62,000,000	77,500,000	15,500,000
Total	117,000,000	77,500,000	(39,500,000)

Note: Most recent estimates as of 01/21/2025

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