CFPB eyes ‘criminal justice financial ecosystem’

The criminal justice system features “an ecosystem rife with burdensome fees and lack of choice,” according to a recent report from the Consumer Financial Protection Bureau.

The criminal justice system features “an ecosystem rife with burdensome fees and lack of choice,” according to a recent report from the Consumer Financial Protection Bureau. 

The agency accused providers of “leveraging a lack of consumer choice and their own market dominance to impose hefty fees” on the families of those involved with the criminal justice system. The report took aim at burdensome fees, lack of consumer choice, and “shifting financial burdens” in which the incarcerated and their families pay for charges related to court operations, court-appointed public defenders, drug testing, prison library use and probation supervision.

In 2019, 2.1 million adults in America were in jail or prison, the bureau said, another 4.4 million were under community supervision such as probation, and 1 in 3 adults (77 million Americans) had a criminal record. That does not include family members or friends who provide financial support to people who have been arrested, incarcerated or released from jail or prison.

“Many incarcerated individuals and their families pay exorbitant fees for basic financial services,” said CFPB Director Rohit Chopra. “Today’s report describes how private companies undermine the ability for individuals to successfully transition from incarceration.”

Last fall, the CFPB penalized prison financial services company JPay for taking advantage of people transitioning out of the corrections system by charging them fees to access their own money on prepaid debit cards they were forced to use and requiring consumers to sign up for a JPay debit card as a condition of receiving government benefits.

The report is the bureau’s first study of the criminal justice financial ecosystem, although it released a guide to financial re-entry as part of its consumer financial empowerment resources.

Fredrikson & Byron Law