Marijuana legalization and record clearing in 2022

CCRC is pleased to announce a new report on recent cannabis-specific record sealing and expungement reforms in the past 18 months. The report, extending CCRC’s fruitful collaboration with the Drug Enforcement and Policy Center at The Ohio State University, is available here. 

An accompanying infographic (reproduced at the end of this postr) summarizes the report’s findings, and includes a color-coded US map showing which states have enacted cannabis-specific record-clearing provisions.  To supplement the map, the report includes an appendix classifying and describing marijuana-specific record clearing statutes in all 50 states, based on CCRC’s 50-state comparison chart on “Marijuana Legalization, Decriminalization, Expungement and Clemency.” 

To put our new report in context, CCRC and DEPC reported 18 months ago on an “unprecedented period for policymaking at the intersection of marijuana legalization and criminal record reform in the first months of 2021,” with four states (New Jersey, New Mexico, New York, and Virginia) legalizing marijuana possession and at the same time providing criminal record relief for past convictions along with a variety of social equity provisions. 

Our report shows this trend continuing into 2022. Since our 2021 report, four additional states (Connecticut, Maryland, Missouri, and Rhode Island) have adopted similar record-clearing provisions in connection with adult-use cannabis legalization, authorizing sealing and expungement provisions that in most cases extend well beyond convictions for legalized conduct.

All four states made at least some relief automatic, removing the burden of a criminal record from many individuals while raising the bar on standards for marijuana record relief nationwide. Like the four states discussed in our earlier report, these four also address racial disparities in marijuana criminalization by directing tax revenue and business opportunities for legal marijuana to individuals and communities disproportionately affected by criminal law enforcement. During this same timeframe, three additional states (California, Colorado, and Massachusetts) enhanced their existing marijuana-specific record sealing statutes.

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SBA reduces criminal history restrictions in one of its business development programs

We are very pleased to see that the U.S. Small Business Administration has taken a significant step toward ending discrimination against justice-affected small business owners in the programs it administers. In a new rule governing certification of veteran-owned businesses for preferential treatment in the award of VA contracts, the SBA has omitted a requirement that business owners must have “good character” to be certified.  This is a step we recommended in commenting on the rule when it was proposed last summer, and we are gratified that the SBA accepted our recommendation.

CCRC’s study of the SBA’s record-based restrictions has identified the “good character” requirement as that agency’s long-established way of weeding out people with a criminal history from the programs it administers, including business loans, disaster assistance, and federal contracting opportunities like the one at issue here. Typically, SBA operating procedures give agency staff broad discretion to deny assistance to justice-affected business owners based solely on untested assumptions about perceived risk and desert embodied in the “good character” requirement. Broad inquiries into criminal history on application forms deter many from even applying.

It was therefore a matter of concern to see a “good character” criterion included when the SBA proposed its veteran-owned business rule last summer. The good news was that this offered a first chance for public comment on how this criterion limits opportunities for justice-affected business owners. And it appears that it has led to a very favorable outcome that augurs well for future SBA criminal record reforms.

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Webinar: Credit barriers for entrepreneurs with a criminal history

Webinar November 10 at 1 EST

Generational Wealth: Credit Barriers for People with a Criminal History

Tune on Thursday Nov. 10 at 1 EST for a webinar hosted by the National Community Reinvestment Coalition on barriers to credit for small business owners with a criminal record.  Panelists, including CCRC’s Margaret Love, will describe the many formal and informal restrictions on access to credit that make it difficult for an entrepreneur with a criminal record to build a business, including those imposed by the U.S. Small Business Administration on access to federally-guaranteed bank loans. These are issues that CCRC has been exploring since the early days of the pandemic when the SBA’s restrictions on the Paycheck Protection Program came to light.

Panelists:

  • Margaret Love, Executive Director, Collateral Consequences Resource Center
  • Lettisha Boyd, Owner and Principal Consultant, Beyond Savvy Consumers
  • Bonnie Crockett, Director of Small Business Lending at Baltimore Community Lending Inc.
  • Susan Grutza, Policy Counsel of the Office of Fair Lending & Equal Opportunity, Consumer Financial Protection Bureau

Register for the webinar here:

https://www.eventbrite.com/e/generational-wealth-credit-barriers-for-people-with-a-criminal-history-tickets-453347894757

The NCRC’s announcement is here:

Nearly 1 in 3 Americans have a criminal record. Each year over 600,000 Americans are released from state or federal prisons and re-enter society. Re-entry into society poses barriers to everyone but disproportionately affects African Americans and other minorities as African Americans and Hispanics make up 56% of the incarcerated population. This disproportionate representation within the criminal justice system impacts these communities and their ability to build generational wealth due to the barriers that exist upon re-entry.

Join us on November 10th as we speak with advocates, a CDFI, and the CFPB about the barriers that exist for people with a criminal record to build wealth and what can be done to overcome these barriers.

 

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Applying for federal disaster assistance with a criminal record

In addition to its lending and other programs in support of small businesses, the U.S. Small Business Administration provides long-term low-interest loans under Section 7(b) of the Small Business Act directly to individuals, businesses, and nonprofits in declared disaster areas. The current devastation wrought by Hurricane Ian in Florida — the subject of a dedicated new page on the SBA’s website — reminded us of some research we published two years ago, at the height of the pandemic, about how people with a criminal record were faring under the SBA’s COVID-related disaster relief program.  The answer initially was “not well.”

Our research indicates that neither FEMA (emergency aid) nor the USDA (farm loans) impose criminal record restrictions on disaster assistance.  But the SBA does.  What’s more, the SBA’s restrictions are not formalized in a regulation but buried in operating procedures.

The criminal history restrictions on SBA economic injury disaster loans (EIDL) under the CARES Act were initially even more restrictive than those that applied to its PPP relief, and they too were never formalized in a rule. The PPP restrictions were rolled back in response to public outcry and lawsuits, and the following year the COVID-related EIDL policy was also rolled back to disqualify the same limited population as the PPP itself (people in prison or on probation or parole, with pending felony charges, or with recent financial fraud and related convictions).  However, criminal record restrictions in the SBA’s general non-COVID lending programs, including its general disaster assistance programs, were not affected.

Now that the SBA’s disaster assistance programs are no longer administered under the exceptional and well-publicized approach of the pandemic-related authorities, we thought it would be timely to take another look at how those programs — presumably including the one that specifically applies to Hurricane Ian relief — are available to people with a criminal record.    

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California poised to expand record clearing to cover most felonies

NOTE: On September 29, Governor Newsom signed into law both of the bills discussed in the post below. They will take effect on January 1, 2023.   

California Governor Gavin Newsom is expected to sign this week two bills that will give that state the broadest record-clearing laws in the nation. Senate Bill 731 would extend both automatic and petition-based and record relief to felony-level offenses, while Senate Bill 1106 would preclude denial of relief based on outstanding court debt in most cases.

When signed into law, Senate Bill 731 will place California at the forefront of record clearing nationwide. It would expand automatic record relief to all felony non-convictions since January 1, 1973, six years after the date of arrest. California law currently excludes felony arrests from eligibility for automatic relief if the charge is serious enough to potentially result in incarceration at a state prison. Other felony non-convictions remain eligible for automatic relief after three years unless the charge was punishable by eight years’ incarceration or more in a county jail, for which the new six-year wait period applies.

SB 731 also expands eligibility for automatic relief to persons convicted of a felony and sentenced to probation on or after January 1, 2005, if they violated probation but later completed all terms of supervision. Current law excludes from relief anyone who violated their probation. The new law requires a four-year conviction-free period after completion of the sentence. This expansion of automatic relief does not apply to certain serious and violent felonies, and ones for which the person is required to register as a sex offender. As noted below, all but the last-mentioned category will now be eligible for relief by petition.

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