Category: Policy

VIDEO: Governmental Barriers to Small Business Financing for People with a Criminal History

On November 18, the Georgetown Center for Business & Public Policy hosted an informative and provocative forum on “Understanding Governmental Barriers to Small Business Financing for People With a Criminal History.”

A video recording of the program is now available on YouTube.

This event marks the first public discussion of our organization’s new initiative aimed at illuminating and reducing barriers to small business financing based on criminal history. The panelists were Sekwan Merritt, owner of an electrical contracting business in Baltimore, David Schlussel of CCRC, Awesta Sarkash of the Small Business Majority, and Chris Pilkerton, a former SBA general counsel and acting SBA administrator.

Sekwan Merritt, who has built a thriving business and employs several people who also have a record, illuminated the challenges he faces as a justice-affected entrepreneur in gaining access to business capital. Merritt, a graduate of the Georgetown Pivot Program, was one of the plaintiffs in the litigation that led to the SBA’s rollback of its PPP restrictions after he was denied this emergency COVID-19 federal relief. He explained that because he is still on parole he is ineligible for the SBA’s general loan programs and that the kinds of questions asked on SBA application forms frequently deter people from even applying. Merritt also described the need for a holistic assessment as part of an overall credit evaluation, recognizing achievements such as educational attainment, rather than a frequently-disqualifying early inquiry into criminal record.

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National maps on expungement, pardoning, and voting rights restoration

The Collateral Consequences Resource Center is pleased to unveil six new maps that visualize the Center’s research on national laws and policies for restoring rights and opportunities to people with a record. These maps are now available below and on the 50-state comparison pages (expungement, sealing & other record relief; civil rights; and pardoning). Each state can be clicked for a detailed summary of state law and policy.

The Center will keep these maps updated, along with the rest of the Restoration of Rights Project, with future changes to the law.

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CCRC’s First Newsletter

Dear Subscribers,

We write with an update on our continued work to promote public discussion of restoration of rights and opportunities for people with a record. Highlights from this year’s work are summarized below, including roundups of new legislation, case studies on barriers to expungement, policy recommendations, and a new “fair chance lending” project to reduce criminal history barriers to government-supported loans to small businesses. We thank you for your interest and invite your comments as our work progresses. Read more

Federal policies block loans to small business owners with a record

Starting a small business is increasingly recognized as a pathway to opportunity for individuals with an arrest or conviction history—particularly given the disadvantages they face in the labor market. An estimated 4% of small businesses in the United States have an owner with a conviction (1.5% have a felony conviction). Small businesses provide “a vital opportunity for those with a criminal record to contribute to society, to earn an honest profit, and to give back to others.” They also frequently employ people with a record and help reduce recidivism. A growing number of organizations and government programs are devoted to supporting individuals with a record in building their own businesses.

Yet many structural barriers remain, including a series of little-known federal regulations and policies that impose broad criminal history restrictions on access to government-sponsored business loans, notably by the U.S. Small Business Administration (SBA).  A recent article illustrates the steep challenges faced by business owners with a record by telling the stories of several entrepreneurs who were either denied an SBA loan or were discouraged from even trying for one because of a dated felony conviction.  One of those entrepreneurs comments: “You might do five years, ten years, one year, but you pay for it until you’re in the grave.”

To illuminate and help reduce these barriers, our organization is working to develop a new “Fair Chance Lending” project. We hope to show that—rather than broadly exclude individuals with a criminal history—officials should draw record-based restrictions as narrowly as feasible, facilitate access to resources, and celebrate entrepreneurial efforts, consistent with growing national support for reintegration and fair chances in civil society.

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“After Trump: The Future of the President’s Pardon Power”

M_fsr.2021.33.5.coverThis is the title of the new issue of the Federal Sentencing Reporter, which is now available online. As explained by the FSR editors in the issue’s introduction, FSR is continuing its tradition of exploring each president’s pardoning practices at the end of their term:

This Issue of the Federal Sentencing Reporter shines a light on the state of clemency today, with an emphasis on the federal system and events of the Trump administration.  This Issue thus continues an FSR tradition of exploring federal clemency practices under each president, starting in 2001 after President Bill Clinton created controversies with final-day pardons.  Over the last twenty years, an array of commentators have analyzed the actions (and inactions) of four presidents, each of whom embraced quite different goals, perspectives, and strategies.  In addition to bringing thoughtful new perspectives to recent events, the articles assembled today by guest editor Margaret Love, the indefatigable advocate, scholar, and former Pardon Attorney, offer a roadmap to, in her words, “restore legitimacy to the pardon power and its usefulness to the presidency.”  The editors of FSR are — once again — deeply grateful for Ms. Love’s efforts and expertise.

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People with records excluded from growing occupations

People with arrest and conviction records continue to demand that employers and policymakers remove unfair barriers to work. Their demands have spurred much-needed legislative change, including “fair chance licensing” laws that reform restrictions on working in occupations requiring a government license or certification. Such changes are crucial to achieving racial equity. Decades of biased policing and charging have left Black and Latinx communities with disproportionately high rates of records, thus compounding the economic disinvestment and other disadvantages resulting from structural racism.

In support of fair chance licensing advocacy efforts, the National Employment Law Project (NELP) recently developed a set of short fact sheets evaluating the legal barriers that face people with records who desire to work in growing occupations in eight states–Colorado, Delaware, Indiana, Louisiana, Michigan, Ohio, Oregon, and Tennessee. Given the confusing tangle of statutory and regulatory restrictions in most states, focusing on growing professions in high-demand industries may prove to be an important strategy for state advocates who seek to maximize job opportunities for people with records.

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DC’s non-conviction sealing law is uniquely complex and restrictive

Last year, 20 states enacted reforms expanding access to expungement, record-sealing, and other forms of record relief. Many legislatures, including the District of Columbia Council, are considering reform proposals this session. Given the progressive steps taken by the District in the past year to expand opportunities for people with a criminal record to vote and obtain occupational licensing, we are optimistic that the Council will enact significant improvements to its lagging record-sealing law.

Compared to states across the country, DC’s record relief law is very prohibitive and unusually complex. First, its non-conviction sealing scheme is “one of the most restrictive” in the country (as we described it in our Model Law on Non-Conviction Records). Second, to seal a misdemeanor conviction, an 8-year waiting period must be satisfied (far longer than most states), and then a series of rules exclude individuals based on a long list of ineligible offenses and a variety of disqualifying prior and subsequent records. Finally, DC allows only a single specific felony conviction to be sealed,1 while 34 states allow a range of felonies to be sealed or expunged.

This post explains how DC’s law on sealing of non-conviction records in particular does not fare well in the national landscape.

Summary

Current DC law is out of step with national trends toward automatic and expedited sealing of non-conviction records at or shortly after disposition (approaches enacted last year in Kentucky and North Carolina, for example). It is also more complex and restrictive than analogous laws in almost every state in three primary areas:

  • The waiting period before a person may apply for sealing a non-conviction record is longer than in most states, and the effect that a prior or subsequent conviction has on extending the waiting period is unusually severe.
  • The provision ruling out sealing for a successfully completed deferred sentencing agreement based on the person’s other record is counterproductive and harsher than the norm.
  • The procedures and standards that apply in proceedings to seal a non-conviction record are more burdensome and restrictive than in any state, differing little from the procedures and standards that apply to sealing a conviction record.

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Study measures gap between availability and delivery of “second chance” relief

Professor Colleen V. Chien of Santa Clara University has published a major empirical study in the Michigan Law Review that examines the gap between eligibility for and actual delivery of relief from contact with the criminal justice system, a construct she calls the “second chance gap.” (The term is defined with examples here.) Last week, Chien led a team of law students, researchers and data analysts from Santa Clara University in launching the Paper Prisons Initiative, a project that draws on her study’s methodology to estimate this gap for each state’s record relief laws.

During the current wave of criminal record reforms that began around 2013, every state legislature has taken steps to chip away at the negative effects of a record through authorizing or expanding expungement, sealing, and other forms of record relief. At the same time, it has become evident that bureaucratic and structural obstacles prevent many of these laws from achieving their full promise—particularly when they require a potential beneficiary to navigate a complex and burdensome judicial or administrative process.

Last June, Professors Sonja B. Starr and J.J. Prescott published the first broad-based empirical study of a state law limiting public access to criminal records, revealing that just 6.5% of those eligible for relief in Michigan successfully completed the application process within five years. This conclusion has given additional impetus to the movement to make record-sealing automatic: six states now authorize “clean slate” relief for a range of conviction records, 16 states do so for non-conviction records, and clean slate campaigns are underway in several additional states.

In “America’s Paper Prisons: The Second Chance Gap,”  Professor Chien provides a more general perspective on the gap between eligibility and delivery of second chance relief documented for Michigan by Starr and Prescott. In her article, Chien looks at three forms of relief from contact with the criminal justice system—record-clearing, restoration of voting rights, and shortening prison sentences. Based on her analysis, the paper concludes that in many cases only a small fraction of those eligible for relief (usually less than 10%) have received it. Most notably, she uses novel data collection and analysis to estimate that at least 20 to 30 million American adults have non-conviction records that appear to be clearable under existing law but that have not been cleared. In follow-up state-specific papers available on the Paper Prisons Initiative website, she and her team have estimated the second chance expungement gap in convictions relief for a number of states.

I.

The first part of “America’s Paper Prisons” explores the reasons for the “second chance gap”:

In the same way that the accused remain innocent until proven guilty in the U.S. criminal justice system, many second chance programs require defendants to “prove” that they deserve second chances before awarding them. As such, getting one’s second chance through petition-based processes may include enduring a bureaucratic process, amassing information through a variety of sources, and being evaluated by an adjudicative or administrative body. The high cost of doing so in many cases may be insurmountable.

Chien divides the barriers that contribute to the second chance gap into three categories: administrative barriers, like informational and transactional costs; structural barriers, like a requirement to pay court debt and participate in a formal court hearing; and substantive barriers, like perceptions that the costs of the process outweigh its benefits.[1]

II.

The second part of Chien’s paper estimates the second chance gap for an assortment of relief mechanisms, drawing on both original data collection and secondary sources. Chien uses two metrics: the “uptake gap,” which measures the share of individuals over time who are eligible and have not applied or not received relief; and the “current gap,” which looks at the share of individuals at the certain moment in time who are eligible but have not received relief. Her analysis shows, on a nearly uniform basis, that only a small percentage of eligible individuals obtain relief in petition-based programs.

The relief mechanisms she studies confer different benefits, are animated by differing policy objectives, and vary in eligibility criteria and administrative process. Still, a general pattern is clear across the following second chance gaps that Chien presents:

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President Biden orders DOJ to facilitate voting for people in federal custody or under supervision

On election day in 2016, Crystal Mason, a Texas mother of three, cast a provisional ballot. She was unaware that Texas considered her ineligible to vote because she was on federal supervised release at the time. Six months later she was arrested. A year and a half later, she was convicted of voter fraud and sentenced to five years in prison. Mason, who is Black, believes that her prosecution was “politically and racially charged.” An appeals court upheld the conviction, ruling that whether Mason knew she was ineligible to vote was irrelevant to the case against her. She is pursuing further appeals.

At trial, one of Mason’s supervision officers, Ken Mays, testified that he had not informed her that she could not vote in Texas while on federal supervised release because it was not part of standard procedure: “That’s just not something we do.”

Now, a few years later, a new executive order issued by President Joe Biden will change standard procedure to require the notice Ms. Mason never received. The order also directs the Justice Department to facilitate voting for people in federal custody or on supervision who are eligible to vote in their state of residence.

In recent years, there has been growing attention to the racist origins of felony disenfranchisement, to its racially disparate effect, and to how restoration of voting rights strengthens our democracy. This past Sunday, March 7, 2021, was the 56th anniversary of “Bloody Sunday,” an infamous day when Alabama troopers violently beat civil rights marchers—including the late John Lewis, civil rights leader and longtime member of Congress—on the Edmund Pettus Bridge in Selma. While delivering an address to mark the occasion, President Biden announced that he had issued an Executive Order directing every federal agency to promote access to voting.

The Order includes an ambitious directive to the Attorney General to provide voter education materials to hundreds of thousands of individuals in federal custody, under federal supervision, or formerly incarcerated, and to facilitate voting for those who are eligible under state law. See Sec. 9 (“Ensuring Access to Voter Registration for Eligible Individuals in Federal Custody”). This represents “the first time the federal government has ever taken action to ensure justice-involved voters can participate equally in our democracy.”

As Crystal Mason’s case demonstrates, many people with a record lack clear information about their eligibility to vote, due to misinformation and the complexity of state laws and policies governing voting rights for people with a record. (CCRC documents and explains these laws and policies in our 50-state resources.) Further, eligible voters in jail and prison face practical challenges that often make registration and voting difficult or impossible.

Newly-confirmed Attorney General Merrick Garland will surely direct sufficient resources and expertise to implementing this directive. The result could be a radical expansion of voting education and access for millions of individuals with federal criminal records, with ripple effects benefiting tens of millions with state criminal records. Moreover, given the widespread racial disparities in the criminal justice system, this effort could significantly improve access to voting for Black communities and other communities of color, issues that Garland prioritized at his Senate confirmation hearing.

This article briefly outlines the state of the law governing loss and restoration of voting rights due to conviction. It then reviews the specifics of Biden’s directive, discussing its potential impact on four groups: (1) individuals in the custody of the Federal Bureau of Prisons; (2) individuals detained in jails under contracts with U.S. Marshal Service; (3) individuals under the supervision of the Office of Probation and Pretrial Services in the Administrative Office of U.S. Courts; and (4) formerly incarcerated individuals.

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Virginia poised to enact “transformative” record clearance law

Editor’s Note:  We are delighted to post a description of the broad new record relief bill now awaiting Governor Northam’s signature, by an attorney-advocate who was actively involved in the campaign to secure its passage. Rob Poggenklass describes the ambitious new law and how it came to be enacted, as well as likely next steps for record clearance in a jurisdiction that is swiftly becoming one of the nation’s leaders in record reforms. In addition to automatic sealing, the bill’s provisions for appointment of counsel, elimination of a fingerprint requirement for petitions, and regulation of private screening companies are particularly significant for reducing access barriers and ensuring effectiveness.

The Virginia General Assembly has passed transformative legislation to allow sealing of convictions, including low-level felonies, for the first time in the Commonwealth, and to establish a system of automatic sealing of police and court records for many offenses. About 1.6 million Virginians have a criminal record, which creates significant barriers to employment, housing, education, and other necessities of life.

The legislation reflects a compromise between an automatic expungement bill sponsored by Del. Charniele Herring and a mostly petition-based one brought by Sen. Scott Surovell. It also reflects the sustained work of directly impacted individuals and other advocates who organized and insisted on far-reaching, automatic, and equitable expungement legislation.

The legislation must be signed by Governor Ralph Northam before it becomes law, but the governor is expected to sign it. After the House and Senate could not agree on record sealing legislation during a special session in the fall of 2020, the governor hired a mediator to help negotiate the compromise bill that passed both chambers in 2021.

The legislation includes five key provisions. The bill:

  1. Establishes a system of automatic sealing for misdemeanor non-convictions, nine types of misdemeanor convictions, and deferred dismissals for underage alcohol and marijuana possession.
  2. Allows for contemporaneous sealing of felony acquittals and dismissals with the consent of the prosecuting attorney.
  3. Provides for sealing a broad range of misdemeanor and low-level felony convictions and deferred dismissals through a petition-based court process. Notably, court debt will not be a barrier to record clearance under the legislation.
  4. Introduces a system of court-appointed counsel for individuals who cannot afford an attorney for the petition-based sealing process.
  5. Forces private companies that buy and sell criminal records to routinely delete sealed records and creates a private right of action for individuals against companies that refuse to do so.

Most provisions of the bill are not currently set to take effect until July 1, 2025, to give the Virginia State Police and the courts sufficient time to update their computer systems. Increased funding or other future action by the General Assembly could change the effective date.

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