
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 11, 1994                   TAG: 9402110136
SECTION: VIRGINIA                    PAGE: B-1   EDITION: METRO 
SOURCE: WARREN FISKE STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium

HOUSE KEEPS FUNDING FOR LEGAL AID

A House committee on Thursday gave the legal needs of poor people priority over the competing financial interests of banks.

By a 10-8 vote, the Corporations, Insurance and Banking Committee killed legislation that would have allowed banks to pocket millions of dollars in interest on short-term escrow accounts they keep for lawyers.

The action means that most of the interest will continue to be used to pay for legal aid for Virginians who are too poor to afford lawyers - at least for another year.

"This was the right thing to do," said Edwin Burnette Jr., president of the Virginia State Bar and a chief lobbyist against the bill. "We're delighted."

But the sponsor of the bill - Del. Glenn Croshaw, D-Virginia Beach - vowed to renew his efforts next year to allow banks to control the interest.

In 1983, Virginia established a voluntary program that allowed lawyers to dedicate the interest on their short-term escrow accounts to an arm of the state bar.

About one-third of Virginia's lawyers joined the program. In 1991, the interest generated $1.2 million for the Legal Services Corp. of Virginia, which oversees the state's legal aid program.

But the program failed to keep pace with the needs of 800,000 Virginians who qualify for legal aid.

To generate more money, the Virginia Supreme Court last fall required lawyers to participate. The expanded program is expected to generate $4.5 million for legal aid. Banks objected to the mandatory program, accusing the Supreme Court of overstepping its bounds by imposing a business regulation on banks.

But supporters of the program said the banks wanted to keep the interest for themselves.

"The issue is not about regulation by the Supreme Court," said Linda Byrd-Harden, executive director of the state NAACP. "The issue is that legal aid is so underfunded that 84 percent of low-income Virginians can't get the legal representation they're entitled to. I'm appalled when bankers say this program is harmful. Who are they speaking for?"

Keywords:
GENERAL ASSEMBLY 1994

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