Ex-Inmates Face Problems Re-Entering Financial System

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Each year, more than 600,000 people are released from U.S. prisons. The financial consequences can follow them long after. It can be hard to get checking accounts and nearly impossible to get loans. Some get out and discover their identities were stolen. That all makes it hard for ex-inmates to get jobs, start businesses or find housing, reports the Wall Street Journal. In Florida and other states, court debts cost the right to vote. The problems trap all sorts of criminals, from small drug offenders to white-collar swindlers. For Black men, nearly six times more likely than white men to be in prison, the financial aftermath is another byproduct of a justice system weighted against them. A 2019 U.S. Commission on Civil Rights report found people of color are disproportionately arrested for nonviolent crimes like loitering and disorderly conduct, and are sentenced more harshly, “which amplifies the impact of collateral consequences.”

These repercussions push some people back into crime. Programs to help former inmates have won widespread support. Big corporations including JPMorgan Chase & Co. have committed to hiring applicants with criminal records. There has been little attention on how to get ex-prisoners into the mainstream financial system. The nation’s biggest banks have pledged billions of dollars of investments in minority communities. None has publicly mentioned getting former inmates banking products, but some are discussing plans. Getting a bank account can be hard. Many ex-inmates don’t have government identification, the first step. A system banks use for screening customers snags many others. Commonly referred to by the brand name ChexSystems, the system flags old overdrafts, bounced checks and accounts closed involuntarily, problems common among former inmates. Many of the formerly incarcerated have bad credit scores, a big hurdle in getting a loan, an apartment, even a job.

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