The Florida Bar Foundation April 26 received $23,048,159 to be used for foreclosure prevention and community redevelopment, as mandated by a 2014 national settlement between Bank of America and the U.S. Department of Justice and six states.
“Our staff will be developing plans for the use of the funds and the grantmaking process,” Foundation CEO Bruce B. Blackwell said. “We will continue to work closely with our Grants Committee and with key stakeholders. We are thrilled to receive these funds and are determined to be strategic about how they will be invested.”
The Foundation, one of 56 legal assistance organizations receiving a total of $490 million under the settlement, has been consulting with its peer Interest on Lawyers’ Trust Account (IOLTA) programs around the country on strategies for the effective use of the funds. Each state, along with the District of Columbia, Puerto Rico and the Virgin Islands, operates an IOLTA program, and each program received a payout based on poverty population.
The distributions were triggered in December by President Obama’s signing into law an act extending federal tax relief through 2016 to homeowners who otherwise would have incurred income-tax liability from mortgage debt forgiveness they received under the consumer-relief provisions of the settlement. A fund set aside for tax assistance then became surplus. The settlement’s independent monitor, Eric D. Green, was required under the settlement to distribute 75 percent of the surplus to eligible legal-assistance organizations in each state and 25 percent to NeighborWorks America, which provides training and support to community-based redevelopment programs nationwide.
The Foundation will follow the lead of the majority of IOLTA programs and will allocate the funds over several years to projects and initiatives with significant systemic impact, expanding the scope of its grants beyond those programs the Foundation has historically funded.
Meanwhile, a quarter-point increase in the federal funds rate in January has not resulted in a widely-hoped-for increase in revenue from Florida’s Interest on Trust Accounts program, as so far Florida banks have not increased the rates they pay on IOTA deposits. Meanwhile, the Foundation has exhausted its reserve, drawn investment income from its endowment, taken a loan from The Florida Bar and utilized other previously earmarked funding sources, including its building fund and disaster relief fund, in order to keep grant funding at the current level.
The Foundation has notified its grantees that it will allocate $7.7 million to grants in 2017, the same amount it allocated in 2015 and 2016, based on a three-year plan first implemented in 2015 to stabilize grant funding.
As plans are developed for the use of the Bank of America settlement funds, the Foundation will provide ongoing updates to its grantee legal aid organizations around the state.