The Consumer Financial Protection Bureau has just issued an extraordinary new report on the financial challenges faced by justice-involved individuals in navigating each stage of the criminal justice system. The report, which describes itself as “the first of its kind done by the CFPB,” paints a devastating picture of how the criminal law enforcement system conspires at every step to exacerbate the financially precarious situation in which many entering the justice system already find themselves.
“Justice-Involved Individuals and the Consumer Financial Marketplace” documents in clear and compelling prose how the financial products and services marketed to individuals and families entangled in the criminal justice system “too often contain exploitative terms and features, offer little or no consumer choice, and can have long-term negative consequences for the individuals and families affected.” What the CFPB researchers found “raises serious questions about the transparency, fairness, and availability of consumer choice in markets associated with the justice system, as well as demonstrating the pervasive reach of predatory practices targeted at justice-involved individuals.”
At the beginning of each year since 2017, CCRC has issued a report on legislation enacted in the past year that is aimed at reducing the barriers faced by people with a criminal record in the workplace, at the ballot box, and in many other areas of daily life. These reports have documented the steady progress of what last year’s report characterized as “a full-fledged law reform movement” aimed at restoring rights and status to individuals who have successfully navigated the criminal law system. The legislative momentum, which slowed a bit during the first year of the pandemic, picked up again in 2021.
The title of this post introduces our annual report on new laws enacted during the past year, and emphasizes the continuum from reentry (for those who go to jail or prison) to the full restoration of rights and status represented by reintegration. Recent research indicates that most people with a conviction never have a second one, and that the likelihood of another conviction declines rapidly as more time passes. The goal of full reintegration is thus both an economic and moral imperative.
In the past year the bipartisan commitment to a reintegration agenda has seemed more than ever grounded in economic imperatives, as pandemic dislocations have brought home the need to support, train, and recruit workers who are essential to rebuilding the businesses that are the lifeblood of the economy. If there is any one thing that will end unwarranted discrimination against people with a criminal history, it is a recognition that it does not pay.
Our 2021 report highlights key developments in reintegration reforms from the past year. It documents that 40 states, the District of Columbia, and the federal government enacted 151 legislative bills and took a number of additional executive actions to restore rights and opportunities to people with an arrest or conviction history. As in past years, a majority of these new laws involved individual record clearing: All told, an astonishing 36 states enacted 92 separate laws that revise, supplement or limit public access to individual criminal records to reduce or eliminate barriers to opportunity. Most of these laws established or expanded laws authorizing expungement, sealing, or set-aside of convictions or arrest records. Several states enacted judicial record clearing laws for the very first time, and a number of states authorized “clean slate” automatic clearing. Executive pardoning was revived in several states where it had been dormant for years.
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.
We are delighted to announce a program where a panel of experts will discuss the barriers faced by small business owners and managers with a criminal history in obtaining government-sponsored loans.
This virtual program will take place on November 18 from 12:00-1:15pm (EST), and is sponsored by the Georgetown Center for Business and Public Policy as part of its Georgetown on the Hill series. Register for the event here.
The program–which we helped organize along with Georgetown’s PIVOT Program–will focus on the broad criminal history restrictions in rules and policies of the U.S. Small Business Administration. These policies came to the public’s attention in the early days of the pandemic, when thousands of small businesses were denied PPP and other relief authorized by the CARES Act. While many of these restrictions were eventually rolled back in response to widespread criticism, similar restrictions in the SBA’s general lending programs remain, restrictions that influence state and private lending as well. The program on November 18 will explore the origins, scope, and justification for these restrictions.
Panelists include a former high-ranking SBA official, a small business owner who successfully challenged the PPP restrictions in court, a scholar who has argued that the SBA restrictions contravene civil rights law, and the CCRC’s Deputy Director David Schlussel, who contributed to the bipartisan campaign in the spring of 2020 that led the SBA to abandon many of its exclusionary policies.
We hope that everyone interested in collateral consequences, notably those related to access to business capital, will register for the program. The Georgetown announcement describing the program is reproduced below.
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.
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
Update: This decision was stayed by the North Carolina Court of Appeals on September 3, 2021. As a result, the decision will not go into effect either until the appeal is resolved or further order of the court.
A three-judge state court in North Carolina has ruled that state’s felony disenfranchisement law unconstitutional as applied to individuals under supervision in the community, immediately restoring the vote to some 56,000 individuals. The decision means that in 24 states and the District of Columbia individuals convicted of felonies and serving a sentence in the community may vote. North Carolina is the first southern state to restore the vote to convicted individuals upon release from prison.
As the New York Times noted in describing the court’s action, the ruling was “not entirely unexpected,” since “the same court had temporarily blocked enforcement of part of the law before the November general election, stating that most people who had completed their prison sentences could not be barred from voting if [the] only reason for their continued supervision was that they owed fines or court fees.” See Community Success Initiative v. Moore, No. 19-cv-15941 (N.C. Super. Ct. Sept. 4, 2020).
While last year’s preliminary decision rested on the ground that requiring payment of court debt represented an poll tax, the challenge to North Carolina’s reenfranchisement scheme relied more broadly on its origins in intentional post-Civil War discrimination against Black people. As the Times article noted, the decision “followed a trial that bared the history of the state’s disenfranchisement of Black people in sometimes shocking detail.”
The law struck down on Monday, which was enacted in 1877, extended disenfranchisement to people convicted of felonies in response to the 15th Amendment, which enshrined Black voting rights in the Constitution. But in the decade before that, local judges had reacted to the Civil War’s freeing of Black people by convicting them en masse and delivering public whippings, bringing them under a law denying the vote to anyone convicted of a crime for which whipping was a penalty.
A handful of Black legislators in the General Assembly tried to rescind the 1877 law in the early 1970s, but secured only procedural changes, such as a limit on the discretion of judges to prolong probation or court supervision.
The court has not yet released its opinion, and state officials may decide to appeal.
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.