Legal Aid of North Carolina has shut down a second office in one of the state's poorest counties in response to a freeze on more than $6 million in grant assistance the nonprofit gets from the North Carolina Interest on Lawyers' Trust Accounts, or NC IOLTA — its second-largest funding source.

The statewide nonprofit announced Wednesday that it has terminated the lease on its Pembroke office in rural Robeson County, a decision it attributed to the Legislature freezing all NC IOLTA grant funding for legal assistance programs until well into next year. NC IOLTA uses the income generated from interest on lawyers' trust accounts to fund civil legal services. But the North Carolina General Assembly temporarily shut the grant program down this summer amid fears the money was going to what GOP lawmakers view as left-leaning organizations.

Legal Aid of North Carolina provides free legal services to individuals who could not otherwise afford it and is a nonpartisan organization that does not engage in political advocacy or lobbying, according to its website. Among its clientele are members of the Lumbee Tribe, which is headquartered in Pembroke.

Legal Aid's Pembroke office — which services Hoke, Robeson and Scotland counties in eastern North Carolina — is the second state office to close in as many weeks after the nonprofit announced Oct. 21 that it was shutting its doors in Rocky Mount, leaving just 22 offices in operation. The closest Legal Aid office to Pembroke appears to be about a 45-minute drive away in Fayetteville.

"The impact would be deeply felt by Pembroke residents — particularly veterans, seniors, survivors of domestic violence, and disaster victims — who rely on LANC's services for safety and stability," Legal Aid said in a news release announcing the closure.

Lawmakers in the House Select Committee on Oversight and Reform, which is currently probing how NC IOLTA grants are administered, did not immediately respond Thursday to Law360's request for comment in response to the closure. The CEO of Legal Aid of North Carolina also did not immediately respond to a request for information regarding the size of its client base in Pembroke and whether the organization is exploring gap funding sources to offset the IOLTA shortfall.

While Legal Aid this week opened a new office in Raleigh, the nonprofit said funding for that office was provided by the city of Raleigh through the American Rescue Plan Act.

The Pembroke office first opened in 1978 and has "long been a cornerstone of community legal support, continuing the legacy of Julian Pierce, a pioneering attorney who championed access to justice for the Lumbee community and underserved residents of Robeson County," according to the news release.

"Julian Pierce built a foundation of access to legal help in Pembroke when the office opened in 1978, and we have worked tirelessly to keep that legacy alive," Ashley Campbell, CEO of Legal Aid of North Carolina, said in the release. "Even in the face of unprecedented funding challenges, we are doing everything we can to maintain a physical presence in Pembroke and ensure residents continue to have access to justice."

Pembroke has a population of around 2,800 and is the third-largest city in Robeson County. North Carolina's Office of State Budget and Management classifies Robeson as a county in persistent poverty, meaning at least 20% of the population had incomes below the poverty level. Robeson County has met that threshold since 1997.

Between 2019 and 2023, 54% of households in Robeson County had incomes under 200% of the poverty level — the highest in the state, according to a March 2025 report by the North Carolina Budget & Tax Center. About 24% of Native Americans in North Carolina lived in poverty during that time frame — the highest percentage of any race.

Legal Aid of North Carolina was planning a new downtown office in Pembroke, but the NC IOLTA freeze forced those plans to a standstill and created "uncertainty about the organization's long-term physical presence in Pembroke," the nonprofit said.

It's now working with "local partners and community members to find a sustainable solution that keeps services accessible to residents who depend on in-person support," according to the news release.

Campbell previously told Law360 that Legal Aid of North Carolina had 24 offices across the state prior to the freeze, a dozen of which are in rural communities. The organization relies on IOLTA grants to fill in gaps in funding from local governments in those rural areas, she said.

This year, Legal Aid of North Carolina received $6.3 million in funding from NC IOLTA, making NC IOLTA the organization's second-largest funding source, Campbell said. Legal Aid of North Carolina is the largest recipient of NC IOLTA funding.

But that funding was thrown into limbo after lawmakers passed Senate Bill 429, which bars NC IOLTA from awarding grants from July 1 until June 30, 2026. According to Campbell, the threat of losing its funding next year has forced Legal Aid of North Carolina to consider closing between eight and 10 of its offices.

The N.C. House Select Committee on Oversight and Reform held a hearing on Oct. 22 in which Peter Bolac, executive director of the North Carolina State Bar, and Mary Irvine, executive director of NC IOLTA, were asked to testify about the grant application process.

Rep. Harry Warren, who chairs the committee, expressed concern during that hearing that "IOLTA has gone somewhat rogue awarding grants to leftist groups with leftist ideologies."

Republican lawmakers seemed to take issue with smaller grant recipients that expressed a commitment to diversity, equity and inclusion or that opposed local law enforcement's cooperation with U.S. Immigration and Customs Enforcement. They also voiced concerns about adequate funding for civil legal services in rural communities.

Bolac, the State Bar director, noted during the hearing that the NC IOLTA freeze was likely to have a disparate impact on rural communities. If lawmakers want to protect those areas, he said, "the best way is to get this money out the door."

--Editing by Amy French.