Category: Policy

“The High Cost of a Fresh Start”

The High Cost of a Fresh Start: New Report Examines Court Debt as a Barrier to Clearing a Conviction Record BOSTON – A new report from the National Consumer Law Center and the Collateral Consequences Resource Center explores the extent to which court debt—such as criminal fines, fees, costs, and restitution—is a barrier to record clearing that prevents poor and low-income people from getting a second chance. For the nearly one-third of adults in the U.S. with a record of arrest or conviction, their record is not simply part of their past but a continuing condition that impacts nearly every aspect of their life. Their record makes it hard to get a job and support a family, secure a place to live, contribute to the community, and participate fully in civic affairs. “Criminal record clearing must not be reserved only for those who can easily pay for it,” said Margaret Love, executive director of CCRC. “States should ensure people are not being priced out of a chance at a fresh start.” The High Cost of a Fresh Start: A State-by-State Analysis of Court Debt as a Bar to Record Clearing analyzes whether outstanding court debt bars record clearing under the laws of each of the 50 states, the District of Columbia, and the federal system. The report finds that in almost every jurisdiction, outstanding court debt is a barrier to record clearing, either rendering a person entirely ineligible or making it more difficult for them to qualify. In recent years, most states have passed laws aimed at restoring economic opportunity, personal freedoms, and human dignity to millions of people by providing a path to clear their record. But for too many, this relief remains out of reach because of monetary barriers, including not only the cost of applying for record clearing but also requirements in many jurisdictions that applicants pay off debt incurred as part of the underlying criminal case before they can have their record cleared. This debt can include fees imposed for every month someone spends on probation or on GPS monitoring, and for their representation by a public defender—a fee that is levied only on people whom the court has deemed too poor to pay for their own defense. Interest and payment penalties can add to this court debt over time. “The total amount of court debt can run to thousands of dollars for even minor infractions, which presents a high bar to clear,” said Ariel Nelson, staff attorney at NCLC. “Perversely, because a record makes it much harder to get a job, having an open record makes it harder to pay off court debt and therefore harder to qualify for record clearing.” This burden falls especially heavily on Black and Brown communities, which are more likely to have high concentrations of both criminal records and poverty because of long-standing structural racism in criminal law enforcement and in the economy. Based on their research, the authors offer the following recommendations: Court debt should never be a barrier to record clearing.Qualification for record clearing should not be conditioned on payment of court debt, and outstanding court debt should not be a basis for denying relief, regardless of whether record clearing is petition-based or automatic. Costs to apply for record clearing, including filing fees, should never be a barrier to record clearing. States should adopt automatic record-clearing processes that do not require individuals to incur costs to have their records cleared. Jurisdictions should collect and report data on monetary barriers to record clearing.Jurisdictions where record clearing may be denied on the basis of outstanding court debt should collect and report data reflecting the impact of these barriers on record clearing. Download the full report for report findings, recommendations, maps, graphics, and state-by-state analysis: https://bit.ly/lp-high-cost-of-a-fresh-start-22 The report’s appendix cointains a state-by-state analysis of the role played by outstanding court debt in qualifying for record clearing.  It may be separately downloaded at this link:  https://www.nclc.org/images/pdf/criminal-justice/High-Cost-of-Fresh-Start-Appendix.pdf  ### The nonprofit National Consumer Law Center® (NCLC®) works for economic justice for low-income and other disadvantaged people in the U.S. through policy analysis and advocacy, publications, litigation, and training. The Collateral Consequences Resource Center (CCRC) works to restore rights and opportunities to people with a history of arrest or conviction through research and policy advocacy.   — Read more

When banks ask loan applicants about their arrest record

The National Community Reinvestment Coalition reports that its evaluation of small business loan applications from a sample of seven banks in Washington, DC revealed that “some lenders discriminate against applicants who have been charged at any time in their lives with a criminal offense.”  A comment on the NCRC website proposes that these banks consider applicants to be “a lending risk for having been ‘ever charged’ with any crime, other than a minor vehicle violation, no matter when it occurred.”  It goes on to argue that “[t]his practice is not only factually suspect, it is discriminatory.”  The comment, written by Anneliese Lederer, the NCRC’s Director of Fair Lending, was subsequently republished in The American Banker.  The NCRC findings demonstrate that even interactions with the criminal justice system that do not result in a conviction record can have “lasting implications:” It is known that having a criminal record is a barrier to both housing and employment. There are few protections for people with a criminal record. But what about for people who have been charged and found not guilty, or their charges were dropped? What barriers do they face? Unfortunately, they face similar barriers as people who have a criminal record, especially in the small business lending arena. Citing CCRC’s analyses of lending policies of the Small Business Administration, the NCRC comment highlights how these policies have given banks cover for their discriminatory practices: Small business loans administered by the Small Business Administration (SBA) have broad criminal history restrictions. Analysis conducted by the Collateral Consequences Resource Center (CCRC) found that no statute requires criminal history to be used as a factor in determining creditworthiness. Instead, the Small Business Act uses the words “may verify the applicant’s criminal background.” Furthermore, many restrictions that the US Small Business Administration (SBA) implements on interactions with the justice system are not codified. These restrictions are “either unannounced or only disclosed through FAQs published on the agency’s website…..[or] through policy statements and application forms.” The NCRC evaluation found that some commercial loan applications “require an applicant to answer yes or no to a question about their criminal history,” language that “is too broad and violates the Equal Credit Opportunity Act” for two reasons: It causes a disparate impact based on race It discourages applicants from applying Disparate Impact Disparate impact occurs when a neutral policy has a disproportionately negative effect on a protected class. The disclosure language “ever been charged…for any criminal offense” results in a disparate impact on the protected status of race for Black applicants. Black people are disproportionately charged for crimes at a higher rate than White people. The New York Times highlighted that “African-Americans make up only about 6 percent of San Francisco’s population, [yet] they accounted for 38 percent of cases filed by prosecutors between 2008 and 2014.” This disclosure language includes people who are falsely charged. More Black people are falsely charged than White people. The NAACP found that “[a]s of October 2016, there have been 1900 exonerations of the wrongfully accused, 47% of the exonerated were African American.” Furthermore, the language on these applications does not distinguish between: a felony vs. a misdemeanor; the type of crime committed like a financial crime vs. assault; if the applicant was a minor when the crime was committed; or length of time since the crime was committed. Financial institutions will assert a business justification for criminal history as it can significantly impact a person’s ability to repay the loan. Under the effects test, financial institutions can fulfill this business justification in a less discriminatory manner by adding language that does not leave the time period open-ended, distinguishes between a felony and a misdemeanor, distinguishes if the applicant was a minor at the time the crime was committed, and provides a list of crimes that require disclosures. Discouragement  The presence of this question can result in potential applicants being discouraged from applying. Discouragement occurs because applicants believe that answering this question will deny them credit. Therefore, they do not apply. Discouragement is a form of discrimination under ECOA and its implementation of Regulation B, section 1002.4(b). Moving Forward Financial institutions need to review their applications to ensure that they are not violating fair lending laws. But this is only part of the solution. Fair lending compliance programs need to ensure that when criminal history is used for credit decisions, its use is narrowly tailored in both time limit and specific crimes that are connected to financial risk, money laundering or terrorism. Financial institutions should not harm potential applicants who are creditworthy simply because they had some engagement in the past with the criminal justice system. CCRC is continuing to research the history and effect of the SBA’s lending policies as part of our Fair Chance Lending project.  Among other thgings, we hope to publish a report showing how the SBA’s policies compare with analogous policies of other federal and state agencies that guarantee small business loans.  We expect to host a series of programs in the spring to explore these issues further, building on the program hosted last November by the Georgetown Center for Business and Public Policy as  part of its Georgetown on the Hill series.  We were pleased to see that our research on SBA lending restrictions was featured in the recently issued report on of the Consumer Financial Protection Bureau, discussed at this post.   Read more

Reintegration Champion Awards for 2021

Based on our annual report on 2021 criminal record reforms, the bipartisan commitment to a reintegration agenda keeps getting stronger. A majority of the 151 new laws enacted last year authorize courts to clear criminal records, in some states for the very first time, and several states enacted “clean slate” automatic record clearing.  Other new laws restore voting and other civil rights lost as a result of conviction, and still others limit how criminal record is considered by employers, occupational licensing agencies, and landlords.  (The report includes specific citations to each of the new laws, and they are analyzed in the larger context of each state’s reintegration scheme in our Restoration of Rights Project.) Again this year we have published a Report Card recognizing the most (and least) productive legislatures in the past year. While more than a dozen states enacted noteworthy laws in 2021, two states stand out for the quantity and quality of their lawmaking:  Arizona and Connecticut share our 2021 Reintegration Champion award for their passage of three or more major pieces of record reform legislation. Arizona – The state enacted eight new laws, including a broad new record clearing law, two laws improving its occupational licensing scheme, and a judicial “second chance” certificate. Arizona also repealed a law authorizing suspension of driver’s licenses for failure to pay and authorized its courts to redesignate some felonies as misdemeanors. Connecticut – Enacted a major automatic record clearing scheme, restored the right to vote and hold office upon release from prison, provided for record clearing in connection with marijuana legalization, and broadened expungement for victims of human trafficking. Another eight states and the District of Columbia earned Honorable Mention for their enactment of at least one major new law: Alabama – Enacted first state record-clearing authority applicable to misdemeanor convictions and pardoned felonies, and extended non-conviction sealing. California – Gave retroactive effect to automatic conviction sealing law enacted in 2019. (This new law may be the most consequential of any enacted last year in terms of its impact on criminal records in the state, and it was done without fanfare or publicity.) District of Columbia – Enacted a comprehensive scheme to limit consideration of criminal record in occupational licensing. Illinois – Added employment discrimination based on conviction to the state Human Rights Act, authorized voter education for prisoners. New Jersey – Enacted a landmark fair housing bill; made some improvements to its 1970’s-era occupational licensing law; and, provided for automatic record clearing in connection with marijuana legalization. (New Jersey was our Reintegration Champion for 2019, but evidently is not resting on its laurels.) New Mexico – Improved 1970’s-era public employment and licensing law; authorized expungement of marijuana convictions; and, enacted a substantial part of the Uniform Collateral Consequences of Conviction Act, limiting and providing relief from collateral consequences. Ohio – Expanded eligibility for record-clearing; significantly improved occupational licensing law. Virginia – Authorized petition-based and automated record-clearing of non-convictions and convictions, including convictions for marijuana possession; restored vote upon release by executive order and took steps to amend constitution to this end. Washington – restored vote upon release from prison; amended occupational licensing standards for health professions; repealed driver’s license suspension based on outstanding financial obligations Low marks go to three states that enacted no record reform laws at all in 2021. While there are six other states in this category this year, the legislatures of Alaska, Massachusetts, and Wisconsin earn their place at the bottom of the heap for having been equally unproductive in 2020 and 2019, years in which almost every other state passed at least some law limiting access to and use of criminal records. The profile of each state’s restoration of rights scheme from CCRC’s Restoration of Rights Project is linked above (except for the states that made no progress). The profiles contain citations and links to the relevant new laws so that interested individuals can check their specific terms. Read more

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. CCRC’s David Schlussel described how the SBA’s “broad and blunt” record-related restrictions first came to the public’s attention in the early months of the pandemic, when hundreds of thousands of small businesses—a substantial percentage of which were Black-owned—were disqualified from government-supported relief. Schlussel traced the history of the SBA’s restrictive loan policies to the 1950’s, noting that they are neither required nor specifically authorized by statute. He quoted from a 1978 SBA statement justifying these policies based on its belief that the SBA “should not be involved in rehabilitation processes,” that “good character is essential in any creditworth transaction,” and that the possibility of reincarceration creates a risk of absentee management. Schlussel described the conclusion of a 2005 law review article by Taja-Nia Henderson that the SBA restrictions appear to violate civil rights laws in their heavy impact on Black business owners, and he noted that there has been no empirical study linking criminal record with creditworthiness. In any case, the SBA has apparently not attempted to justify its policies since 1978, even as they have become increasingly restrictive in recent years. He noted that the other major federal lending agency, the USDA, has nothing comparable for its rural small business and agricultural lending programs. Awesta Sarkash of the Small Business Majority was effective in describing the difficulties minority- and women-owned small businesses generally have in accessing capital, noting that these difficulties are exacerbated when a business owner or manager has a criminal record. Sarkash also emphasized the importance of resources to support early-stage entrepreneurs, such as her organization’s Venturize.org educational portal, and community development financial institutions (like Baltimore Community Lending that helped Sekwan Merritt manage a large contract). Chris Pilkerton, a former SBA general counsel and acting SBA administrator, made a number of very cogent suggestions about how to address this important public policy question through coalition building, message coordination, bipartisanship, and education. Several of the panelists noted that the SBA is by far the country’s most influential player in facilitating small business access to capital, and that its policies necessarily influence both private lenders and state legislatures considering analogous state loan programs. The panel was moderated by Dr. Crystal Francis, assistant director of program management of the Georgetown Pivot Program, who engaged with the panelists in a wide-ranging discussion and facilitated audience questions. The video of the event is available here. As CCRC continues to develop our “Fair Chance Lending” project, we are finding that agencies and organizations involved in small business and community financing are eager to extend their agendas to address barriers based on a criminal record. Regular visitors to our website can expect to hear about this issue frequently in the months to come. Read more

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. I. Record Relief (Expungement, Sealing, Set-Aside) The first three maps categorize each state’s record relief laws based on the availability of conviction relief, automatic relief, and non-conviction relief: Authority for Expunging, Sealing, or Setting Aside Convictions Broader felony & misdemeanor relief Limited felony & misdemeanor relief Misdemeanors & pardoned felonies Misdemeanor relief No general sealing or set-aside Note: Even if misdemeanor and/or felony relief is generally available, various offenses are generally ineligible. Conversely, states categorized as having no court sealing or set-aside may make relief available to limited categories of convictions (e.g., youthful drug convictions, convictions of human trafficking victims) and nearly all authorize sealing of at least some non-conviction records. Automatic Record Clearing A range of non-convictions, misdemeanors & certain felonies A range of non-convictions & misdemeanors Certain minor misdemeanors Certain marijuana-related records A range of non-convictions+ Note: A number of these laws have been enacted recently but have not yet been implemented or become effective. “Misdemeanors” and “felonies” refers to convictions. Although not noted in the chart, a number of laws covering misdemeanor and/or felony convictions also cover infractions and/or violations. Process for Expunging or Sealing Non-Convictions Automatic relief+ Expedited at disposition++ or upon admin. request Court petition (less burdensome/ restrictive) Court petition (more burdensome/ restrictive)* n/a + These automatic relief mechanisms may be limited: they may be prospective only or exclude certain dispositions.  In several states, uncharged arrests are not covered, and require the filing of a court petition to obtain relief. ++ Where relief is “expedited at disposition,” uncharged arrests typically require the filing of a court petition to obtain relief, and older cases may as well. * Often, more burdensome procedural requirements apply, such as waiting periods, document collection, service of process, filing fees, contested hearings, discretionary review. In addition, a number of these states make certain non-convictions wholly ineligible for relief because of the person’s past record, the nature of the charges, or the type of disposition.   II. Voting Rights The next pair of maps classify state laws regarding loss and restoration of voting rights due to conviction: Loss of Voting Rights Due to Conviction Never Upon felony conviction & incarceration Upon any conviction & incarceration Upon conviction for a listed offense Upon felony conviction Upon conviction for felony or certain misdoes Restoration of Voting Rights Lost Due to Conviction Not lost On release from custody Completion of incarceration & parole (or earlier Completion of incarceration & supervision Completion of incarceration, supervision, & specified court debt Only by executive clemency   III. Pardoning A final map categorizes states in terms of pardoning frequency: Relative Pardoning Frequency Frequent/Regular (regular process; significant % of apps granted) Sparing/Regular (regular process; small % of apps granted) Infrequent/Uneven (irregular process, depends on governor) Rare (few or no pardons in 20 years) Read more