Lone Star National Bank announced it would become a Prime Partner in the state's Interest on Lawyer's Trust Accounts program.

The program receives funding from the interest generated from IOLTA accounts and uses the money for grants to legal aid service providers across the state, including Texas RioGrande Legal Aid, Proyecto Libertad and ProBar.

Prime Partner banks pay interest at higher rates than other participating banks.

After federal funds rate cuts initiated by the Federal Reserve to encourage lending Lone Star National Bank's commitment becomes critical, according to Betty Balli Torres, executive director of the Foundation.

"We're taking a huge hit," Balli said. "Legal Aid programs are severely underfunded and unable to meet the overwhelming demand for legal services."

The Texas Access to Justice Foundation's 2008 IOLTA revenue was projected to be $28 million, but based on recent interest rate cuts, it is now projected to be $12.5 million.

Amid the current financial crisis, additional interest rate cuts are likely to further reduce legal aid funding in Texas.

Next year's revenue is projected to drop to $7.5 million.

That's where Prime Partners, such as Lone Star National Bank, help mitigate the decline in revenue available to fund legal aid.

"Locally, the ratio of eligible clients to legal aid attorneys is 25,000 to one," said Geraldo Perez, senior vice president of Lone Star Bank. "Joining the Prime Partner Program is an excellent opportunity to get additional funding into the hands of those who serve."

The Texas Access to Justice Foundation was created by the Supreme Court of Texas in 1984 and is the leading state-based funding source for the provision of civil legal aid in Texas.

The foundation provides funding for legal aid to approximately 100,000 Texans each year.

By law, lawyers must deposit client money in separate accounts from their own. Some deposits are too small to create separate accounts, so the money is deposited in an IOLTA account. Statewide there are 20,000 such IOLTA accounts.

The interest generated from these accounts is used to provide for civil legal services.

The recent interest rate cut to 1 percent means that as a Prime Partner, Lone Star National Bank will pay .7 percent compared to .1 others pay.

"That may not sound like a lot, but it has a significant impact on providing money for legal services," Balli said.