[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
ACCESS DENIED: ELIMINATING BARRIERS
AND INCREASING ECONOMIC OPPORTUNITY
FOR JUSTICE-INVOLVED INDIVIDUALS
=======================================================================
HYBRID HEARING
BEFORE THE
SUBCOMMITTEE ON DIVERSITY
AND INCLUSION
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 28, 2021
__________
Printed for the use of the Committee on Financial Services
Serial No. 117-48
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
46-007 PDF WASHINGTON : 2021
HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri ANN WAGNER, Missouri
ED PERLMUTTER, Colorado ANDY BARR, Kentucky
JIM A. HIMES, Connecticut ROGER WILLIAMS, Texas
BILL FOSTER, Illinois FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio TOM EMMER, Minnesota
JUAN VARGAS, California LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina
CINDY AXNE, Iowa DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts ANTHONY GONZALEZ, Ohio
RITCHIE TORRES, New York JOHN ROSE, Tennessee
STEPHEN F. LYNCH, Massachusetts BRYAN STEIL, Wisconsin
ALMA ADAMS, North Carolina LANCE GOODEN, Texas
RASHIDA TLAIB, Michigan WILLIAM TIMMONS, South Carolina
MADELEINE DEAN, Pennsylvania VAN TAYLOR, Texas
ALEXANDRIA OCASIO-CORTEZ, New York PETE SESSIONS, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts
Charla Ouertatani, Staff Director
Subcommittee on Diversity and Inclusion
JOYCE BEATTY, Ohio, Chairwoman
AYANNA PRESSLEY, Massachusetts ANN WAGNER, Missouri, Ranking
STEPHEN F. LYNCH, Massachusetts Member
RASHIDA TLAIB, Michigan FRANK D. LUCAS, Oklahoma
MADELEINE DEAN, Pennsylvania TED BUDD, North Carolina
SYLVIA GARCIA, Texas ANTHONY GONZALEZ, Ohio, Vice
NIKEMA WILLIAMS, Georgia Ranking Member
JAKE AUCHINCLOSS, Massachusetts JOHN ROSE, Tennessee
LANCE GOODEN, Texas
WILLIAM TIMMONS, South Carolina
C O N T E N T S
----------
Page
Hearing held on:
September 28, 2021........................................... 1
Appendix:
September 28, 2021........................................... 35
WITNESSES
Tuesday, September 28, 2021
Cook, Sakira, Senior Director, Justice Reform Program, The
Leadership Conference of Civil and Human Rights................ 4
Korzenik, Jeffery, author of, ``Untapped Talent''................ 6
Martin, Dolfinette, Housing Director, Operation Restoration...... 8
Sorenson, Melissa, Executive Director, Professional Background
Screening Association.......................................... 11
Tran-Leung, Marie Claire, Director, Legal Impact Network, Shriver
Center on Poverty Law.......................................... 9
APPENDIX
Prepared statements:
Cook, Sakira................................................. 36
Korzenik, Jeffery............................................ 45
Martin, Dolfinette........................................... 50
Sorenson, Melissa............................................ 52
Tran-Leung, Marie Claire..................................... 62
Additional Material Submitted for the Record
Beatty, Hon. Joyce:
Written statement of the Alliance for Safety and Justice..... 72
Written statement of the Bank Policy Institute............... 75
Written statement of the Collateral Consequences Resource
Center..................................................... 77
Written statement of the First Step Alliance................. 84
Written statement of the National Association of Federally-
Insured Credit Unions...................................... 89
Written statement of the National Employment Law Project..... 90
Written statement of the National Low Income Housing
Coalition.................................................. 107
Written statement of the Chris Wilson Foundation............. 111
ACCESS DENIED: ELIMINATING BARRIERS
AND INCREASING ECONOMIC OPPORTUNITY
FOR JUSTICE-INVOLVED INDIVIDUALS
----------
Tuesday, September 28, 2021
U.S. House of Representatives,
Subcommittee on Diversity
and Inclusion,
Committee on Financial Services
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:05 a.m., in
room 2128, Rayburn House Office Building, Hon. Joyce Beatty
[chairwoman of the subcommittee] presiding.
Members present: Representatives Beatty, Pressley, Lynch,
Tlaib, Dean, Garcia of Texas, Williams of Georgia, Auchincloss;
Wagner, Lucas, Gonzalez of Ohio, and Timmons.
Ex officio present: Representative Waters.
Chairwoman Beatty. The Subcommittee on Diversity and
Inclusion will come to order.
Without objection, the Chair is authorized to declare a
recess of the subcommittee at any time. Also, without
objection, members of the full Financial Services Committee who
are not members of this subcommittee are authorized to
participate in today's hearing.
With the hybrid format of this hearing, we have some
Members and witnesses participating in person, and others on
the Webex platform.
I would like to remind all Members participating remotely
to keep themselves muted when they are not being recognized by
the Chair. The staff has been instructed to not mute Members,
except when a Member is not being recognized by the Chair, and
there is inadvertent background noise.
Members are also reminded that they may only participate in
one remote proceeding at a time. If you are participating
remotely today, please keep your camera on, and if you choose
to attend a different remote proceeding, please turn your
camera off.
Today's hearing is entitled, ``Access Denied: Eliminating
Barriers and Increasing Economic Opportunity for Justice-
Involved Individuals.''
I now recognize myself for 4 minutes to give an opening
statement.
I am pleased to conduct this hearing today. The United
States of America has a large population of incarcerated
persons, with 2.1 million Americans in prison. One in three
American adults have been arrested and 78 million Americans
have a criminal record.
These are our neighbors, our friends, and our family
members, and we are a nation of second chances. But today, we
will learn firsthand through testimony of justice-involved
individuals and their advocates about the nearly insurmountable
barriers to employment and financial inclusion that justice-
involved individuals face.
Let me just share this with you. There are 10.9 million job
openings in the United States, 10.9, and unfortunately,
justice-involved individuals are too often shut out from these
opportunities.
Craig Arnold, a leading Fortune 500 executive, said, ``A
felony conviction may as well be a life sentence when it comes
to reentering the workforce.''
Employers who want to provide opportunities for justice-
involved individuals face a regulatory structure that increases
risk and minimizes the benefit to the individuals and the firm.
Federal regulations for employment of justice-involved
individuals should be simplified to maximize the benefit to
potential employees and employers while maintaining the safety
and soundness of these markets.
The financial services industry recognizes the need to
include justice-involved individuals in their hiring efforts.
JPMorgan Chase has exemplified leadership on this front with
their second chance agenda, hiring individuals with arrest
records and convictions.
But here is the part that makes me highlight this. They
have been able to account for 10 percent of their new hires in
2019, and they even wrote an op-ed arguing that if you have
paid your debt to society, you should be allowed to work, and
that is what the second chance program is about.
This is also another form of diversity and inclusion, that
we are family, we are friends, and we all need to be able to
say we are trying to move the needle.
Most individuals returning to society from prison are
released without any savings or job prospects, and often lack
the funds for housing application fees, security deposits,
rent, and the list goes on. This reality often leads to
homelessness and prevents those individuals from building
relationships with their families and support networks.
Yet, the criminal justice system demands that they walk a
tightrope in compliance to avoid violating the terms of their
release, in many cases.
Justice-involved individuals also have limited access to
financial education, financial products, and services. We must
ban the box of isolation, financial exclusion, and biases,
which often prevents justice-involved individuals from
supporting their families and contributing to our economy.
So today, I am introducing the Fair Hiring in Banking Act
to empower depository institutions to build pathways to
opportunity and economic security for those who are seeking a
second chance and a brighter future.
I now call upon my colleagues to join me in creating
pathways to employment and financial access to reduce
recidivism, strengthen the economy, and stabilize families and
communities.
With that, the Chair now recognizes the ranking member of
the subcommittee, Mrs. Wagner, for 5 minutes for an opening
statement.
Mrs. Wagner. Thank you, Madam Chairwoman, and thank you to
our witnesses for joining us today to discuss the economic
opportunities and barriers for individuals who have been
involved with the criminal justice system.
Gainful employment is a key factor in reducing recidivism
for justice-involved individuals. In the banking sector, we
have seen positive steps taken by the FDIC to ensure that the
hiring practices at an insured depository institution still
protect the safety and soundness of financial services, while
also giving those who are qualified, rehabilitated, and ready
to work a fair chance at securing employment.
Over the past few years, the FDIC made notable changes to
the hiring prohibitions listed in Section 19 of the Federal
Deposit Insurance Act for individuals with certain minor
criminal offenses, otherwise known as de minimis crimes, on
their records. In 2018, the FDIC further expanded de minimis
crimes to cover small-dollar simple theft, and isolated minor
offenses carried out by individuals 21 years or younger.
Since then, the FDIC has continued to refine Section 19 to
protect the safety and soundness of our financial institutions.
FDIC Chair Jelena McWilliams has commented that Section 19
should not serve as, ``a barrier to entry for individuals who
have committed minor crimes in the past, paid their debt to
society, reformed their conduct, and are now seeking to gain
employment with a financial institution.''
In July of 2020, the FDIC adopted a rule which made several
changes to Section 19. The new rule excludes crimes that have
been expunged or sealed, reduces the 5-year waiting period to 3
years, changes the threshold amount for small-dollar theft from
$500 to $1,000, and expands the exemption for use of fake
identification from alcohol-related crimes to all crimes
related to purchases or premises entry.
I completely agree with Chair McWilliams, and support these
changes that narrow the scope of crimes subject to Section 19,
to allow for more individuals looking for a second chance to
work in the banking industry, and still protect the Deposit
Insurance Fund.
Today's hearing is also timely, with a record-setting 10
million job openings in the United States of America, and more
than 8 million still unemployed. It is critical that we ensure
that those who can work, achieve employment, so that they can
provide for their families and become self-sustainable,
especially as our economy recovers from the COVID-19 pandemic.
Access to employment is vital to upward economic mobility,
and we should carefully examine any barriers that might exist
while ensuring the integrity of our institutions and the safety
of employers and employees and the security of our financial
system.
Thank you, Madam Chairwoman, and I yield back the balance
of my time.
Chairwoman Beatty. Thank you so very much to our ranking
member. We will now welcome the testimony of our distinguished
witnesses: Ms. Sakira Cook, the senior director of the Justice
Reform Program at the Leadership Conference of Civil and Human
Rights; Mr. Jeffery Korzenik, the author of, ``Untapped
Talent,'' and yes, I think that is the power of the hidden
workforce; Ms. Dolfinette Martin, the housing director of
Operation Restoration; Ms. Marie Claire Tran-Leung, the
director of the Legal Impact Network at the Shriver Center on
Poverty Law; and Ms. Melissa Sorenson, the executive director
of the Professional Background Screening Association.
Witnesses are reminded that their oral testimony will be
limited to 5 minutes. You should be able to see the timer on
your screen or on the desk in front of you that will indicate
how much time you have left. When you have one minute
remaining, a yellow light will appear. I would ask you to be
mindful of the timer, and when the red light appears to quickly
wrap up your testimony, so we can be respectful both to you and
the other witnesses and the subcommittee members. You will hear
a slight tap, and then you will hear that your time is up.
And without objection, your written statements will be made
a part of the record.
Ms. Cook, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF SAKIRA COOK, SENIOR DIRECTOR OF THE JUSTICE REFORM
PROGRAM, THE LEADERSHIP CONFERENCE OF CIVIL AND HUMAN RIGHTS
Ms. Cook. Chairwoman Beatty, Ranking Member Wagner, and
members of the subcommittee, thank you for the opportunity to
testify today on the critical importance of creating new
economic and social pathways for justice-involved people to
thrive.
I would like to focus on two key areas of interest to the
Leadership Conference: predatory lending; and fair chance
hiring.
But first, in order to have a more fruitful conversation
about how to expand opportunities for people exiting the
criminal legal system, my written testimony touches on the
factors that put so many people into the system and place them
at a staggering disadvantage upon leaving it.
The U.S. incarcerates more than any other country in the
world, with more than 2 million people currently incarcerated.
Overcriminalization and incarceration have devastating impacts
on those ensnared in the criminal legal system and their
families, and disproportionately harm low-income communities
and communities of color.
Yet, the criminal legal system does not produce any
proportional increase in public safety. Instead, it produces a
permanent underclass, with more than 70 million people with a
record who are too often shut out of meaningful educational and
career opportunities and exploited by predatory financial
forces.
This leads to a cycle of legal and economic and social
hardships carried from one generation to the next.
In 2019, the Leadership Conference released, ``Vision for
Justice: A New Paradigm for Public Safety.'' This report, which
we request be included in the record, outlines an agenda for
transformation that prioritizes up-front investments in non-
carceral programs and social services and keeps communities
truly safe.
One of the many obstacles that justice-involved people,
particularly people of color, face in successfully reentering
society is accessing the mainstream financial system.
As author James Baldwin once noted, ``Anyone who has ever
struggled with poverty knows how expensive it is to be poor.''
This is especially true for people who are facing lasting legal
and financial consequences and social stigma long after they
have completed their sentences.
One particular area of concern is the proliferation of
payday lenders within communities of color, marketed to people
with poor credit as a convenient way to handle financial
emergencies.
The fees charged by payday loans can quickly equate to
interest rates of 400 percent or higher for loans that are
renewed over the course of a year. Payday lenders are also more
likely to be located near Black borrowers than White borrowers.
We stand for a simple principle: Before making any loan, a
lender should be reasonably certain that a borrower can pay it
back and pay it back on time.
An important first step would be for the Consumer Financial
Protection Bureau (CFPB) to reinstate its 2017 payday rule. We
also urge Congress to enact the Veterans and Consumers Fair
Credit Act, which would impose a 36-percent interest rate cap
on consumer loans.
More directly related to today's hearing is the extension
of fair chance hiring that would allow more justice-involved
people to obtain gainful employment, including in the banking
industry.
Several years ago, we urged the FDIC to reform its rules
under Section 19 of the Federal Deposit Insurance Act. In
particular, Section 19 prohibits banks from hiring anyone who
has been convicted of a criminal offence involving dishonesty
or a breach of trust or money laundering, except with prior
written consent of the FDIC.
The FDIC's previous statement of policy governing Section
19 included several troubling provisions that unduly prevented
justice-involved people from seeking employment in the banking
industry.
Starting in 2018, the FDIC adopted several positive changes
to its policy. Yet, there is still significant room for
improvement.
First, the FDIC must revisit its treatment of drug-related
convictions. As the failure of the war on drugs and its
profoundly discriminatory impact on Black people become
increasingly clear, this blanket treatment of prior drug
convictions is indefensible.
Second, the statutory language should be revised. The
language, ``any criminal offence involving dishonesty or breach
of trust, or money laundering,'' isn't defined and it doesn't
take into account what type of position the applicant is
seeking. For example, it doesn't distinguish between applicants
for clerical and custodial positions and more sensitive
positions.
Third, the FDIC or Congress should require the use of the
Section 19 waiver process less often. For drug offenses and
many others, the Section 19 waiver process is not a workable
fallback. Applying for a waiver is a highly burdensome, costly
process that takes far longer than prospective employees or
employers are typically able to wait.
Fourth, we support further reform of Section 19 and of
similar restrictions under the Federal Credit Union Act, the
Truth in Lending Act, and the the Securities Exchange Act of
1934, to limit any restrictions on justice-involved
individuals.
And finally, as more and more States legalize cannabis, we
call on Congress to pass the Marijuana Opportunity Reinvestment
and Expungement Act, which would allow expungement of
convictions that never should have happened in the first place.
We look forward to working with the subcommittee to expand
opportunities for people leaving the criminal legal system and
toward a new vision of justice that truly keeps communities
safe.
[The prepared statement of Ms. Cook can be found on page 36
of the appendix.]
Chairwoman Beatty. Thank you.
Mr. Korzenik, you are now recognized for 5 minutes to give
an oral presentation of your testimony.
STATEMENT OF JEFFERY KORZENIK, AUTHOR, ``UNTAPPED TALENT''
Mr. Korzenik. Thank you, and good morning, Chairwoman
Beatty, Ranking Member Wagner, and members of the U.S. House
Financial Services Subcommittee on Diversity and Inclusion.
Thank you for this opportunity to testify before the
subcommittee today, and for holding this important hearing.
I come before the subcommittee today in my private capacity
as a researcher, and as the author of, ``Untapped Talent,'' a
book that shares the business case and best practices of second
chance hiring and the employment of people with criminal
records.
Although I am an employee of Fifth Third Bank, my views are
my own, and do not necessarily reflect the views of my
employer.
The criminal justice system, as previously outlined, is
estimated to have left tens of millions of Americans with
criminal records that represent significant barriers to
employment. Unemployment numbers actually underestimate the
waste of human capital from justice involvement. Many, and
possibly the majority of even those with jobs are
underemployed, that is, they are unable to earn and contribute
to the full extent of their capabilities.
We must also recognize that the associated burdens of the
criminal justice system and its failures are not borne equally.
For example, tragically, one in three Black men in America is
burdened with a felony conviction.
The costs of the failure to create more effective systems
of reentry is generally thought of in social terms: poor public
safety; shattered families; and stressed communities.
We, as citizens, and in particular, those of us in the
business community, should also understand that this failure is
of such a magnitude that it also carries a tremendous economic
cost.
When the past mistakes of so many millions of Americans
create barriers to employment, this slows workforce growth.
Barriers to economic mobility should be understood as drags on
productivity.
Even using conservative assumptions as to the work
readiness of the justice-involved population, the costs of our
failure to reintegrate people with criminal records into the
economy should be measured in the hundreds of billions of
dollars of growth that we forsake.
The challenge, of course, is in creating viable pathways to
opportunity that work for the employee, the employer, and the
general public. Criminal justice reforms are often perceived as
offering a tradeoff between public safety and greater justice
for people with criminal records. This is a false choice. We
should recognize that excessive supervision and restrictions
can actually reduce public safety by undermining the employment
of people with records.
However, good policy should be seen as a necessary but not
necessarily sufficient ingredient of better outcomes. Even with
optimal regulation and policy, given the foundational role that
employment plays in rehabilitation, employers ultimately must
lead the way.
Fortunately, we do have the example of numerous pioneering
business owners that have developed processes that work. It is
important to stress that one of the hallmarks of these
successful second chance employment practices is profitability.
Businesses cannot reasonably be expected to hire people who
cannot contribute to the bottom line of the enterprise.
Companies will write checks to charity, but only hire if it is
profitable to do so. Certainly, without such hires being
profitable, second chance hiring can never be scaled to a size
sufficient to address our societal challenge.
The current labor shortage, where job openings exceed the
number of job seekers, is prompting employers to explore hiring
from this demographic. It is important, however, that these
employers view these workers not as a last resort, but as a
pool of true talent that must be judged on an individual basis,
sourced intelligently, and supported appropriately.
Fortunately, leadership in the business community is rising
to the task. Among the notable groups supporting the effort are
the National Association of Manufacturers, the Society of Human
Resource Management, and the newly-formed Second Chance
Business Coalition.
With respect to the industry within the committee's
purview, financial services, there are special considerations,
largely, surrounding reputation risk. The success of a
financial system relies not only upon the actual safety and
soundness of the institutions but also the public perception of
that stability.
However, arguments that the inclusion of workers with
criminal records in financial institutions could undermine
confidence in the industry appear to be unsubstantiated, given,
for example, the very public second chance hiring efforts of
the nation's second largest bank, JPMorgan, the company the
chairwoman alluded to earlier.
Second chance hiring done right is business, not charity.
Good policy can reduce barriers for these practices without
compromising public safety or institutional soundness.
Second chance hiring paves the road to a more prosperous
economy, stronger families, and safer communities. When wise
policies are coupled with the talents of the private sector and
nonprofit partners, we can move toward our national aspiration
to be, truly, a land of opportunity for all.
Thank you.
[The prepared statement of Mr. Korzenik can be found on
page 45 of the appendix.]
Chairwoman Beatty. Thank you so much.
Ms. Martin, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF DOLFINETTE MARTIN, HOUSING DIRECTOR, OPERATION
RESTORATION
Ms. Martin. Thank you, Chairwoman Beatty, Ranking Member
Wagner, and members of the U.S. House Financial Services
Subcommittee on Diversity and Inclusion. Thank you for the
opportunity to testify before the subcommittee today and for
holding this hearing.
My name is Dolfinette Martin, and I am the housing director
of Operation Restoration, a nonprofit created to help remove
barriers for formerly and currently incarcerated women, to help
them reach their fullest potential and discover new
possibilities.
I, myself, am a formerly incarcerated woman who served a
combined 12 years in prison. Upon my release on April 12, 2012,
after serving 7 years, 4 months, and 28 days for shoplifting,
on my first night home, I had no soap, no deodorant, or no
personal items that would help me keep my dignity.
My living situation was me hiding in my elderly mother's
senior living apartment because her lease required that no one
live in her apartment other than her. This went on for a year
after my release. At that time, I began to organize with
grassroots organizations to change the current policies around
public housing and criminal backgrounds at the Housing
Authority of New Orleans (HANO).
We were able to successfully get those policies changed,
but implementation would take another 2 years. Once
implemented, I was nominated to sit on the panel as a tenant of
public housing. This was important, because what was needed was
someone who faced and is still facing the stigma and challenges
of being safely housed in affordable housing due to a
conviction.
This panel is only for people who have not been released
from incarceration within the last 3 years, or their conviction
isn't over 3 years. The reason this panel is so important is
that it gives people the opportunity to receive public housing
regardless of their past.
In the 4 years of panel review, there has only been one
denial. However, oversight is greatly needed, as this is an
agency that is part of a larger problem. Despite some
progressive work we have been able to get HANO to do, third-
party management corporations and private landlords are still
using discriminatory practices, although they receive HUD
funding.
These corporations and private sector landlords are using
arrests as well as convictions to deny access to people. For
instance, the panel could vote to allow access, but if the
tenant is applying for Section 8 housing, then the landlord
does yet another background review and they deny.
In my work with Operation Restoration, and the Vera
Institute of Justice, we have attempted to help many women who
have been denied housing solely because of a conviction, and a
few who only had an arrest with no adjudication of the charge.
This type of discrimination not only affects the safety of
these people, but also the financial hardship that paying $50
application and $25 background checks fees creates. It is
astronomical.
Recently, we had a natural disaster hit our State, and
evacuation efforts created yet another barrier to safe,
affordable housing. Initially, those seeking hotels would have
to pay out-of-pocket, and if FEMA approved the lodging, there
was this barrier called, ``credit card on file for
incidentals.''
If I have no money, job, or credit, then presenting this
lifesaving piece of plastic is nonexistent. So now, I am faced
with yet another barrier to housing.
My personal experience with this is still present to this
day. Although I am fortunate to be gainfully employed, I have a
savings and a checking account, several credit cards, and cash
on hand, I am homeless. Due to the hurricane damaging my roof,
and HANO's negligence to ensure that a tarp was properly placed
on my unit, I am currently paying to live in an Airbnb, have
received zero dollars from FEMA, and am not sure when my unit
will be repaired.
This I bring up solely because I have beaten the odds. As
someone with 10 felony convictions in my past, my present is a
college degree since my release.
I sit on HANO's panel review. I sit on the board of
commissioners of the Audubon Zoo. I sit on the advisory board
for the Formerly Incarcerated Transitional Clinic.
I am a housing director at Operation Restoration. I manage
a transitional home for women. I am an entrepreneur. I have a
working relationship with city government. I was part of our
mayor's transition team and have received numerous awards.
But with all of the access that I have to people in
positions of power, I could not find housing.
[The prepared statement of Ms. Martin can be found on page
50 of the appendix.]
Chairwoman Beatty. Thank you very much, Ms. Martin.
I now recognize Ms. Tran-Leung for 5 minutes to do an oral
presentation of your testimony.
STATEMENT OF MARIE CLAIRE TRAN-LEUNG, DIRECTOR, LEGAL IMPACT
NETWORK, SHRIVER CENTER ON POVERTY LAW
Ms. Tran-Leung. Thank you, and good morning, Chairwoman
Beatty, Ranking Member Wagner, and distinguished members of the
subcommittee.
On behalf of the Shriver Center on Poverty Law, I would
like to thank the subcommittee for holding this important
hearing on eliminating barriers and increasing opportunities
for justice-involved individuals.
And I just want to take a moment to thank my fellow
panelist, Ms. Martin, for sharing her testimony with us today.
Securing safe, decent, and affordable housing often
presents challenges for individuals immediately after release
from the criminal justice system, as well as years after.
Incarceration and homelessness are deeply connected.
Formerly-incarcerated individuals experience homelessness at 10
times the rate of the general public, and this burden of
homelessness is especially acute for Black women, who are 4
times as likely as White men, and twice as likely as Black men,
to experience sheltered homelessness following incarceration.
In the same way that incarceration is a risk factor for
homelessness, a history of homelessness increases the risk of
incarceration. Individuals in jails are 7 to 11 times more
likely to experience homelessness than the population at large.
Housing barriers for justice-involved individuals can also
severely restrain their ability to reintegrate into their
communities by exacerbating other collateral consequences.
Sustained employment and improved relationships with
family, for example, are difficult to achieve in the absence of
safe, decent, and affordable housing. Living with family, as
Ms. Martin referred to, is one of the most affordable and
stable housing options available to justice-involved
individuals, and it is also one of the most commonly-used
options.
Restrictions on where people with criminal records can
live, however, mean that many are living in the shadows rather
than out in the open, especially in federally subsidized
housing, and these illicit living arrangements pose a threat to
the entire family's housing because of the risk of eviction or
subsidy termination, straining the family dynamic.
Rather than dampen the strong family bonds that can help
people leave the criminal legal system behind them for good, it
is time to find a way to reinforce those bonds by reducing
unreasonable criminal records' barriers to housing.
The shortage of affordable housing, especially in cities
where many formerly incarcerated individuals return to, is a
significant barrier for a population whose prior interaction
with the criminal legal system often limits their employment
prospects.
Given this shortage, the need for federally subsidized
housing is especially acute. For the past decade, HUD has
encouraged public housing authorities and project owners to use
their discretion to give second chances, and this encouragement
has led some public housing authorities to adopt more inclusive
policies, such as the Housing Authority of New Orleans.
But, as Ms. Martin referred to, that is not enough. Agency
encouragement in the absence of legislative action will have a
limited impact on removing housing barriers because public
housing authorities and project owners do not consistently use
their discretion to admit people with records.
Some engage in problematic practices like relying on
arrests that never resulted in conviction, failing to place
reasonable time limits on the use of criminal history, using
overly broad categories of criminal activities such as felony
bans, and failing to fully consider mitigating evidence that
shows that a person is more than the four corners of their
criminal background check.
Congress has a chance to address some of these issues
through the Fair Chance at Housing Act, which does several
important things, the most notable being placing more
parameters on the type of criminal conduct that can form the
basis of denying admission and requiring an individualized
review of applicants before denial.
When it comes to housing barriers for people with criminal
records, it is also not enough to regulate housing providers.
Tenant screening companies play an increasingly large role in
the application process both in the federally subsidized
housing market and the private rental market.
Over the last decade, the tenant-screening industry has
flourished and yet it continues to be largely underregulated,
especially compared to employment screening companies providing
similar criminal record information to employers.
At a minimum, we would urge Congress to amend the Fair
Credit Reporting Act (FCRA) to extend existing protections for
employment applicants with criminal records to the tenant
screening context and put employment applicants and housing
applicants on the same footing.
We also urge Congress to amend the Fair Credit Reporting
Act to limit the types of criminal records that can appear in
consumer reports for non-law-enforcement purposes.
[The prepared statement of Ms. Tran-Leung can be found on
page 62 of the appendix.]
Chairwoman Beatty. Thank you. Your time is up, but thank
you so much, Ms. Tran-Leung.
Ms. Sorenson, you are now recognized for 5 minutes for an
oral presentation of your written statement.
STATEMENT OF MELISSA SORENSON, EXECUTIVE DIRECTOR, PROFESSIONAL
BACKGROUND SCREENING ASSOCIATION
Ms. Sorenson. Good morning, and thank you, Chairwoman
Beatty, Ranking Member Wagner, and members of the U.S. House
Financial Services Subcommittee on Diversity and Inclusion.
Thank you for the opportunity to testify today and for holding
this important hearing.
The Professional Background Screening Association (PBSA)
shares the same goals as the public, industry partners, and
Congress in terms of promoting pathways for individuals
reentering society to secure employment and housing
opportunities that help reduce recidivism and the costs borne
by our society and the individuals' families when we fail to
provide a path for successful reintegration.
We also recognize the importance of ensuring employers who
are uniquely positioned with knowledge of their industry, the
positions that they are filling, and the access to consumers
and consumer information have the information and ability to
hire the most qualified candidates, and that housing providers
have knowledge about their tenants to help keep our communities
safe.
Our mission is to advance excellence in the screening
profession. The reports prepared by PBSA's background screening
members are used every day by employers, volunteer
organizations, and housing providers to help make our
communities safe for all who use, work, and reside in them.
PBSA's members, as with all consumer reporting agencies, are
subject to strict regulations under the FCRA.
Additionally, under the Obama Administration, both the EEOC
in 2012, and HUD in 2016, issued regulatory guidance regarding
the use of background checks. In both of these instances, our
Federal agencies recognized the legitimacy for background
checks while offering guidance on their appropriate use.
I will refer you to my written statement that includes a
discussion of the regulatory structure and protections it
affords consumers today including infographics.
With respect to the topic of today's hearing, PBSA has been
actively and constructively engaged with policymakers and
stakeholders in the Federal, State, and other forums to help
promote successful integration of justice-involved individuals,
and we have welcomed the opportunity to discuss this topic
today.
Specifically, we encourage Congress to take the following
actions: adopt a uniform ban-the-box standard for private
employers with preemption for State and local legislation;
adopt carefully tailored employer negligent hiring liability
protections; and expand the application of employer incentives
such as the Worker Opportunity Tax Credit.
First, ban-the-box and fair chance hiring. According to the
National Employment Law Project (NELP) in October of 2020, 36
States and 150 counties and local governments have adopted ban-
the-box policies.
Additionally, later this year Congress will apply the Fair
Chance to Compete for Jobs Act, which will prohibit most
Federal agencies and contractors from requesting criminal
history information before a conditional job offer.
PBSA supports the intent of ban-the-box policies to provide
those with criminal histories the fairest chance possible for
reintegration. However, there are challenges posed by the sheer
number of the varying regulations.
Often, the laws include varied requirements such as
specific wait times for adverse action letters or specific
language requirements in those letters, and much more.
This patchwork has created a burdensome environment for
employers and places otherwise equally positioned applicants on
unequal ground based solely on the city or State they live in.
Therefore, we encourage Congress to adopt a uniform ban-
the-box standard that allows for background checks after the
initial employment application.
Next, employer liability. We would also encourage Congress
to provide employers with liability protections with respect to
negligent hiring. As discussed in greater detail in my written
statement, employers can be confronted with millions of dollars
of liability for hiring employees with criminal records. To
help foster job opportunities for these individuals, a number
of States have taken action to provide protection for employers
who hire them.
While States have structured their protections in different
ways, PBSA recommends immunity for employers based on the
employer's use of the Green factors as outlined in EEOC's 2012
guidance.
Finally, additional employer incentives. We would encourage
Congress to consider an incentive-based approach, including
expansion of the Work Opportunity Tax Credit Program beyond the
current construct that applies only to employment of ex-felons
within one year of release, expansion of the Bonds for Jobs
program by changing the definition of what the bond covers and
the value of the bond, and implementation of certificates of
rehabilitation.
It could be a program led by a governmental agency that
includes individualized assessments and the issuance of
certificates outlining the risk if reoffense is negligible. It
would be a helpful tool for both justice-involved individuals
and employers alike.
Employment extended to a certificate holder could be
accompanied by liability protections for the employer.
We recognize the complexity of these issues and welcome the
opportunity to appear before you today to address these as well
as any other approaches that can help promote racial justice
and increase reentry opportunities for justice-involved
individuals.
Thank you, and I look forward to discussing this with
members of the subcommittee and my fellow panelists today.
[The prepared statement of Ms. Sorenson can be found on
page 52 of the appendix.]
Chairwoman Beatty. Thank you so much, Ms. Sorenson, for
your testimony. I now recognize myself for 5 minutes for
questions.
First, let me just say to you, Ms. Martin, thank you so
much for your personal story and your personal sharing. It
gives us firsthand knowledge of why we value this hearing and
how we hope to move the needle so more people will have a story
that is a little different than your story. But please continue
to tell your story. We appreciate it.
Let me just ask you, as a returning citizen, what are some
of the important resources that justice-involved individuals
need to have or know about to reconnect with their families and
communities?
And I am going to ask you to hold on your answer. I am
going to go straight down the list.
To Mr. Korzenik, some employees face regulatory
restrictions such as the 10-year look back for misdemeanors.
What policies should be implemented to eliminate employment
barriers and what can employers do to leverage this population
in their workforce?
And to Ms. Tran-Leung, each year there are roughly 25,000
returning citizens in my district of Franklin County, Ohio.
Stable housing is a critical need to achieving employment and
financial success. How can we address these biases in access to
housing?
And Ms. Cook, you highlighted discrimination in your
testimony from payday lenders in accessing financial services.
How can we ensure financial background checks for returning
citizens are relevant and germane and increase financial
inclusion?
We will start there, and then I will come back.
Ms. Martin?
And we have limited time so I am going to ask you for
concise responses.
Ms. Martin. Yes, ma'am. Thank you, Chairwoman Beatty.
So initially, on the first day of release, we should have
identification cards--birth certificate, Social Security card--
because if we don't have those things, then housing,
employment, anything that comes after that is nonexistent.
If we are faced with reporting to parole officers, we can't
really keep a job because we have all of these reportings that
we have to do to--for someone else to say we are deemed worthy
of being free, if free is even an option.
So I would say, ID, birth certificate, Social Security
card, the moment we are released. We should leave prison with
those things.
Chairwoman Beatty. Thank you so much.
Mr. Korzenik?
Mr. Korzenik. Thank you.
With regard to the question about misdemeanors and how they
might be considered in the process or what can be done to
alleviate the burdens that those create, some of the most
powerful policies have been various types of expungement or
record sealing.
For example, the State of Michigan has one of the most
comprehensive expungement bills, called the Clean Slate
Initiative. These are very, very powerful because they take
these off of consideration and they de facto eliminate the kind
of negligent hiring liability concerns that might be associated
with having a visible record.
With the broader question of, how can the business
community take advantage of this population, I think it starts
with a recognition of the size of this as an opportunity.
This is an opportunity to get a massive talent base that is
overlooked, but it requires an intentional and well-thought-out
strategy, just as any business would pursue any kind of--
Chairwoman Beatty. Thank you.
Mr. Korzenik. Thank you.
Chairwoman Beatty. Ms. Tran-Leung?
Ms. Tran-Leung. In Ohio, we have worked with a lot of
actually very good housing providers that have been interested
in providing second chances for folks.
I think uplifting those who work well, and then for those
actors who don't house people with records, I think really
looking at enforcement of the Fair Housing Act is really
important for addressing those biases.
Chairwoman Beatty. Thank you.
And Ms. Cook?
Ms. Cook. Yes, I am aware that there are some nonprofits
that connect returning citizens to second chance banking
services, and I think Congress can explore ways to leverage
those partnerships and expand on them.
And then, I would also say that it would be great for
Congress to look at the Fair Credit Reporting Act and see if
there are any provisions around enforcement or the provisions
to limit or that are limiting access to banking services and
financial institutions.
So, those are the two approaches I would suggest that
Congress take.
Chairwoman Beatty. Thank you. And thank you to all of the
witnesses as we move forward looking at diversity and inclusion
from a criminal justice standpoint.
I now recognize the distinguished ranking member from
Missouri, Mrs. Wagner, for 5 minutes for questions.
Mrs. Wagner. Thank you, Madam Chairwoman.
First, Ms. Martin, I, too, want to acknowledge your
strength and your courage in telling your story, and I would
encourage you to continue to do so. We will be there to help,
and the work that you are doing for Operation Restoration and
Hope House is remarkable. So, I thank you.
Mr. Korzenik, you published an op-ed in the Chicago Tribune
last year in which you stated that eliminating the question
about arrests or conviction records on job applications, known
as the ban-the-box policy, has had mixed results and unintended
negative consequences.
You also cited an alternative series of steps you called,
``bridging the box.'' Can you go into further detail, sir,
about the negative consequences of this policy and these
alternative steps?
Mr. Korzenik. Sure. There are two challenges to ban-the-box
in terms of its efficacy. I am by no means against ban-the-box
but it certainly has failed to fulfill the hopes of its
advocates.
Some businesses, apparently, practice avoidance strategies.
For example, we did our own work that suggested that businesses
who did not want to consider these applicants because of their
perceived costs of tapping this pool or having to later discard
people because of a criminal record, seemed to direct them to
avoiding people who had long periods of unemployment on the
thought that it might include prison time, and other kinds of
communities would be avoided.
The other challenge with ban-the-box is it might not really
support or encourage the kind of thoughtful process that might
be let us give it a whirl, let us try someone kind of hire, and
that doesn't seem to be terribly effective.
Mrs. Wagner. What about, ``bridging the box?'' What would
that be?
Mr. Korzenik. ``Bridging the box'' is my name for a couple
of things, starting with recognizing that there are very low-
risk hires. For someone who has been out in the workforce for
10 years, why should an employer care about a criminal history
that preceded that? Those are proven good applicants.
Visiting nonprofits that can be partners in this effort,
visiting employers that are already doing this, educating
yourself on what these things--
Mrs. Wagner. Thank you so much. I need to move on.
Ms. Sorenson, in your testimony, you note that there is a
patchwork of State laws and even a patchwork of policies at the
local level. We see this a lot. You have called for a uniform
ban-the-box policy. Could you discuss what that should look
like?
Ms. Sorenson. Certainly. Thank you.
As you noted, there is a patchwork of varying ban-the-box
laws and regulations at the State and local level. We would be
supportive of a ban-the-box policy at the Federal level that
applies to all private employers alike that would delay the
criminal history inquiry until after that initial employment
application to get everyone situated equally.
Certainly, we recognize, as was just stated, that there are
some open questions with respect to ban-the-box and some of the
unintended consequences that may flow from these policies.
We do want to also recognize the intent of the policies and
move forward proactively with those.
Mrs. Wagner. Ms. Sorenson, I have read that there is some
concern about employer liability. Your testimony discussed
negligent hiring cases. I believe you mentioned protections for
employers that hire individuals who have minor or irrelevant
criminal histories.
But if an employer chooses not to conduct a background
check, perhaps for the reasons we are discussing in this
hearing, and it turns out that the employee had a serious or
relevant crime in their past, what kind of protections would
that employer have?
Ms. Sorenson. Our recommendation is to consider employer
liability protections for those that conduct criminal
background investigations and consider the Green factors,
evidence of rehabilitation, time since the offense, and job-
related as for that.
We would be seeking employer liability protections in those
cases. For employers that choose not to conduct background
checks, that is kind of outside of the scope of our membership
and the work that our members do.
Mrs. Wagner. Okay. And then back on the ban-the-box, what
specific policies have you seen at the State and local level
that you find notable, that work well?
Ms. Sorenson. A uniform ban-the-box that would be
implemented, for example at the State level, that restricts
that employment application inquiry about criminal history
until after the employment application has been submitted
effective.
Mrs. Wagner. Thank you. My time has expired, and I yield
back.
Ms. Garcia of Texas. [presiding]. Thank you.
The Chair now recognizes the Chair of the full Financial
Services Committee, the gentlewoman from California, Chairwoman
Waters, for 5 minutes.
Chairwoman Waters. Thank you very much.
I am very pleased about this subcommittee hearing. We are
dealing with an issue that, of course, really points out the
discrimination, the systemic racism in our society, and so I am
very pleased not only that the subcommittee is holding this
hearing, but I expect our committee to be in the forefront of
getting rid of these discriminatory policies in not only
housing and banking, but in other areas over which we have some
oversight.
Ms. Cook, in June of 2020, many organizations came
together, led by the American Civil Liberties Union, to file a
lawsuit challenging the Small Business Administration (SBA)
rule that barred individuals with certain criminal histories
from receiving Paycheck Protection Program (PPP) loans. The
plaintiff in the case said the criminal justice system already
disproportionately impacts people of color, and destructive
policies that create unnecessary barriers to much-needed
resources such as the PPP serve only to simplify the structural
racism in our justice system. It is long past time to eliminate
rules like this.
The lawsuit was successful, and the court ruled that
barring eligibility for business owners with criminal records
from the SBA's PPP loan application was unlawful. Additionally,
the Biden Administration worked to further broaden access,
allowing thousands of firms to apply for this business-saving
relief.
So, it indicates just by the work that was done dealing
with the CARES program, dealing with the American Relief
Program, and dealing with PPP, that if government acts, we can
get rid of this systemic discrimination in so many different
ways.
Ms. Cook, last year, we fought to further loosen these PPP
restrictions when House Democrats passed the HEROES Act. I also
worked with House Small Business Committee Chair Nydia
Velazquez to set aside $60 billion for Minority Depository
Institutions (MDIs), Community Development Financial
Institutions (CDFIs), and other community financial
institutions to make PPP loans. And we did this because we knew
these institutions have a proven record of reaching underserved
and underrepresented communities, including those that are
justice-impacted.
I have also worked $12 billion in capital investments and
grants for these MDIs and CDFIs into the COVID-19 relief bill
to, again, get money to the communities that need it most.
But these are only first steps. Going forward, we need to
know and understand how we can structure government lending
programs to limit discrimination against people of color and
prevent them from amplifying racial disparities.
And so, let me ask whether or not you have taken a look at
the many ways in which government discriminates, for example,
in public housing, and are working, in our committee, to ensure
that we undo these discriminatory policies that were created by
this government to not allow those returning, say from prison,
to be able to live in public housing units with their parents,
their grandparents, et cetera, et cetera.
I would like to know whether or not you have taken a look
at other ways that we have absolutely initiated and support
discrimination, whether it is in housing or it is in banking or
in other areas. Can you help me with that, and that will help
us dig deeper into what we can do?
Ms. Cook?
Ms. Cook. Absolutely. As you noted, formerly incarcerated
people and people who are reentering society face a myriad of
barriers, not only in financial institutions but in education,
in housing, and in access to social programs and services, and
we are talking about health care, Medicaid access, lifetime
bans on access to Supplemental Nutrition Assistance Program
(SNAP) and Temporary Assistance for Needy Families (TANF)
benefits, the inability to explore higher education because you
can't get access to Federal grants for educational services, et
cetera. And it is important for Congress to look at all of
these barriers across-the-board to ensure that we are
increasing access and opportunity for people in our society.
Chairwoman Waters. Thank you very much.
And I yield back the balance of my time.
Ms. Garcia of Texas. The gentleman from Oklahoma, Mr.
Lucas, is now recognized for 5 minutes.
Mr. Lucas. Thank you, Madam Chairwoman, for holding this
hearing. In particular, thanks to the witnesses for agreeing to
testify.
Mr. Korzenik, you discussed in your testimony how employers
should view individuals with criminal histories as a pool of
talent that should be evaluated on a case-by-case basis.
Can you elaborate on some industry best practices and
organizations that support this effort?
Mr. Korzenik. Thank you very much.
Yes. In the companies that are model second chance
employers that I have observed and studied, you see one of the
critical points is the individualized assessment period.
Typically, in a ban-the-box State, if an offer contingent
on a background check produces a background check, or earlier
in the process, there is a review of that record, the challenge
here is that the committee or individual who typically reviews
that record usually has career disincentives to ever say yes.
And so there is a perceived career risk, particularly to HR
professionals, if they don't have executive support in the
company to promote second chance hiring, it is so much easier
from a career standpoint to say no.
You have offsets to this, like the excellent work being
done by the Society of Human Resource Management and their
Getting Talent Back to Work certification program, but you also
have structural changes you see in these employers.
For example, one of the companies we studied in Michigan,
Cascade Engineering, has a member of the executive team who is
trying to promote second chance employment, and actually makes
that final decision as to whether something in the background
precludes employment.
Other companies, like JBM Packaging, an Ohio-based company,
have a member of one of the lines of business that are
suffering and being challenged by the workforce shortage. They
will put one of those people on that committee. Others will
take an HR professional and assign them the role of advocate on
behalf of those persons.
So that is part of it, and then there is, of course, to the
work advocated by the background check community. Designing a
background check that is very specific and does not overly
exclude candidates where their background is not relevant to
the position would all be examples of what we have seen work
very well.
Mr. Lucas. Absolutely.
Ms. Sorenson, could you further discuss State and local
policies regarding background checks during the application
process that slows down hiring and often has an adverse impact
on individuals with criminal histories looking for work?
Ms. Sorenson. Certainly.
Generally, State and local policies that require background
screening are related to those industries that have licensing
requirements. So when there are licensing requirements at play
for the position, that will require specific components of a
background check be conducted, which often looks for certain
offenses in that background check that might prohibit that
person from being employed.
Generally, that process in the employment context includes
running the background check, and should something come up, an
adverse action process where the consumer is notified of
anything that pops up in the background check that the employer
is considering taking action on, as well as a copy of the
background check and an opportunity to dispute that process
right there and can extend the time for the background check to
be completed.
Mr. Lucas. And continuing with you, Ms. Sorenson, could you
elaborate on the ban-the-box policies and discuss how they
operate differently across sectors?
Ms. Sorenson. Certainly.
Mr. Lucas. Are there exemptions for certain types of crimes
or occupations?
Ms. Sorenson. Generally, ban-the-box policies don't exempt
certain types of crimes or occupations. What they have done in
varying requirements is to require specific wait times for
employers once they send out that initial adverse action
notification, or require specific language be included or
specific talking points that have to be involved in that
process.
Mr. Lucas. You discussed in your testimony the possibility
of expanding the Bonds for Jobs program to include workplace
violence. Could you expand on why you believe this is necessary
and what this change would look like?
Ms. Sorenson. Certainly. One of the key reasons that
employers conduct background checks is for the safety of
consumers and their workforce. The Bonds for Jobs program
provides for a $100 cost--a bond that is extended--to up to
$5,000 for employee dishonesty.
That doesn't cover the real purpose and reason why
employers are doing background checks. So, extending that bond
to further coverage for the real reason that employers are
doing background checks, extending that coverage limit beyond
dishonesty and beyond the $5,000 would be helpful.
Mr. Lucas. Thank you.
And I yield back, Madam Chairwoman.
Ms. Garcia of Texas. The gentleman yields back.
The gentlewoman from Massachusetts, Ms. Pressley, who is
also the Vice Chair of our Subcommittee on Consumer Protection
and Financial Institutions, is now recognized for 5 minutes.
Ms. Pressley. Thank you, and I want to thank Chairwoman
Beatty for convening this critically important hearing.
The mass incarceration crisis disproportionately impacts
Black and Brown communities and, therefore, these communities
face collateral consequences of incarceration, including doors
to reentry and stability slammed shut as a result of criminal
background checks.
Criminal background checks too often bar our justice-
involved neighbors from securing housing and employment. A
recent study, in fact, found that 79 percent of formerly
incarcerated people and their families were denied housing due
to a past criminal conviction.
Black people are more than twice as likely to be arrested
as their White counterparts, and people of color are
drastically overrepresented in the population of those who are
incarcerated.
That is why President Obama, under his Administration, with
the Department of Housing and Urban Development, made the case
that banning tenants with a criminal record can constitute de
facto racial discrimination and, therefore, is a violation of
the Fair Housing Act.
However, here we are more than 5 years later, and it is
still legal to deny tenants in public and private housing for
their involvement with the criminal legal system.
Ms. Martin, I echo the sentiments of my colleagues. I
associate myself with all those and just say the work that you
are doing to center the humanity and to restore others, you are
owed the same, and offline, we will do whatever we can to
support you.
But we thank you in the midst of your own uncertainty and
trauma for coming here to advocate for the millions who stand
to benefit from what we are doing here today.
Ms. Martin, one in three individuals in this country has a
criminal record. This is not abstract for me. Both my husband
and my father, both Black men, are survivors of mass
incarceration, who have gone on to do extraordinary work in
academia, in the nonprofit world, and they have saved lives.
Amanda Gorman said, ``We seek to be not a more perfect
union but a more purposed union,'' and I am so grateful that
they have been able to bring to bear their contributions.
But it almost didn't happen. You and many of the people
that you work with have the lived experience of challenges
returning home and needing to secure housing.
In my own district, the Massachusetts 7th, 30 percent of
those who have been released from correctional facilities were
released to shelters.
So, it is disingenuous to say we want you to get on the
grid, make a positive contribution after you have paid your
debt, when we are not giving people an ID, housing, or income,
even for transit to get to a job interview.
So, again, none of this is abstract. I have seen it. I have
lived it. But you know intimately what these challenges are.
Please lend your expertise, and could you share some of the
specific challenges that justice-involved people face
specifically around housing?
Ms. Martin. Thank you.
To be specific, I share this all the time, and as I talked
about the paper--the ID, birth certificate, Social Security
card that we need.
But as we know, over the past few years the incarceration
of women has risen 800 percent. And so, as we have the
conversations about incarceration, oftentimes women are left
out of those conversations. But we do know that women are now
becoming heads of households and we are the glue that holds
these families together.
So, if there is no safe space for me to sleep or for those
women to sleep with those things, then the desperation sets in.
Over the past 3 weeks, the three emotions that I have visited
the most are fear, desperation, and anxiety. Those very three
things led me to incarceration, because the trauma that lives
within each of us leads us to prison, not the crime that we
commit.
I shared with you all, and I am not sure if you caught it,
but I served 12 years for shoplifting. Desperation brought me
there.
Ms. Pressley. Yes.
Ms. Martin. To be released, my first night home after
almost 8 years, without a change of underwear, desperation is
what leads most folks to prison, trying to survive where I am
and those in my community are today. When we become desperate,
we do what we know.
Ms. Pressley. Thank you. Thank you for centering--
Ms. Martin. Congress can help. And Congress can help by
mandating these public housing agencies, when you get into bed
with third party corporations, if you are taking money from us,
you are going to implement our policies.
Ms. Pressley. Ms. Martin, thank you for that. I do want to
say that my bill would tackle some of these challenges by
preventing tenant screening companies from including most
criminal activity in a background--
Ms. Garcia of Texas. The time has expired.
Ms. Pressley. As we know, people who have been incarcerated
once are 7 times more likely to experience homelessness than
those--
Ms. Garcia of Texas. Your time has expired, Ms. Pressley.
Thank you.
Ms. Pressley. Okay. Thank you. Thank you, Ms. Martin.
Ms. Martin. Thank you.
Ms. Garcia of Texas. The gentleman from Ohio, Mr. Gonzalez,
is now recognized for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Madam Chairwoman, and
thank you to Chairwoman Beatty for holding this important
hearing.
Earlier today, I got off the phone with somebody who is one
of the most inspiring people I talk to on a regular basis. His
name is Maurice Clarett. For those who are from Ohio, you may
know that name.
Maurice was probably the best running back I have ever seen
in my life in college, and he, ultimately, went through some
challenges, and was incarcerated. He came out, and is now one
of the largest podiatry providers in the State in terms of
owning the practices. He has three vascular surgery centers,
hundreds of affordable housing units throughout the State, and
behavioral health clinics that he operates for youth who are
going through trauma in various ways.
And my question to him this morning was, tell me about when
you got out. Tell me about the very moment you got out, what
your plan was, and how difficult it was to actually access
capital.
And the one thing he said, and this will stick with me for
the rest of my life, is he said, ``If I could fight for one
thing in your committee, it would be access to capital for
people like me. Access to capital literally changed my life.''
And he talked about how he went through the traditional
banking route and banks that we are familiar with, if I name
them. He said, ``Look, to me, it felt like I was getting
blacklisted. I came in with my business plan. I had my 20
percent. I wanted to get a loan so I could get off my feet and
I was completely shut out. And it took a personal relationship
with a community bank in Delaware County before somebody
finally said, `I will take a chance on you.'''
And from that, he has built an unbelievably successful set
of businesses. I am so proud of him and just honored to call
him a friend.
But I want to start, Mr. Korzenik, with you. In terms of
the barriers that are in place for justice-involved individuals
like a Maurice Clarett or others who come into Fifth Third Bank
or another bank with their business plan, and they want to get
on their feet, what are those barriers? How are they treated
differently, if at all, from a lending standpoint when they
come in the door?
Mr. Korzenik. I have to say this is not an area of
expertise to me. I do note, obviously, there are challenges
with access to capital, particularly with entrepreneurship, and
this is irrespective of criminal records.
Banks are in the business of lending out other people's
money, and so it is, generally, entrepreneurship lending
through banks comes with people who have collateral. A lot of
entrepreneurs in this country build their resources initially
through families and credit cards, and those are all difficult
resources for this population.
Mr. Gonzalez of Ohio. Absolutely. And let me sort of shift
them to something you might have a stronger opinion on. In
terms of prison entrepreneurship programs, how effective do you
think those are in providing the skills to eventually start and
run a business?
Mr. Korzenik. Because of the access to capital, because of
levels of educational attainment, often coming from challenged
family backgrounds, in terms of creating wildly successful
entrepreneurs, it's probably not terribly successful.
But I don't think that is the appropriate measure. Many of
these entrepreneurship programs offer just terrific general
training, business training, business skills training. They
teach participants to think like business owners, which makes
them great employees, and they also very often may not provide
what we would consider a wildly successful entrepreneurial
result but they create, essentially, effective side hustles
that allow people to manage their finances and to prosper. I
think they are very important programs. It is just that how you
measure their success is important.
Mr. Gonzalez of Ohio. Yes, and I probably should have
prefaced with this. I asked Maurice that same question. He
said, ``Everything I learned was self-taught.'' He said, ``I
read the Economist. I read Forbes. I read about Andrew Carnegie
and the Vanderbilts. I read about every successful entrepreneur
in the history of our country over that period of time and that
is how I learned. That is how I learned anything. And then, I
just networked like crazy when I got out.''
So, there is certainly a lot more that we can do.
Ms. Martin, I guess I will end with you. I only have 30
seconds. But how effective are prison entrepreneurship programs
in providing the skills to eventually start and run a business,
from your experience?
Ms. Martin. I don't have that experience, because most
women's prisons don't have those types of training.
Mr. Gonzalez of Ohio. Yes. I think that is the answer right
there.
Ms. Martin. But I do think it would add a lot if there were
some.
Mr. Gonzalez of Ohio. Yes. So, nonexistent, right?
Ms. Martin. Nonexistent.
Mr. Gonzalez of Ohio. So, another huge gap. And, again, I
want to thank the Chair for this hearing, and I yield back.
Ms. Garcia of Texas. The gentleman yields back.
The gentleman from Massachusetts, Mr. Lynch, who is also
the Chair of our Task Force on Financial Technology, is now
recognized for 5 minutes.
Mr. Lynch. Thank you very much, Madam Chairwoman.
I want to thank all of our witnesses for your willingness
to help this subcommittee with its work, and Ms. Martin, I want
to thank you as well for the power of your example on this
issue, and for your courage in reengaging and helping other
women in similar situations.
I have had an opportunity during my time in Congress to
visit quite a few prisons in Massachusetts and in my district,
as well as houses of correction is what we call them in
Massachusetts.
But to be honest with you, what I have found from my own
observations is that about 90 percent of the prison population
suffers from dual addiction. So, we have an underlying problem
there, and I have been working on this issue for a long, long
time.
But we have an underlying issue there that also creates a
barrier to our neighbors who are coming out of prison, both men
and women. I am involved right now. I founded a residential
drug rehab program in my home community of South Boston geared
towards children--believe it or not, adolescents--because they
are becoming involved with drugs at such a young age.
And now my latest project, a so-called local priority for
my district is to establish a home for women coming out of
prison, and it is going to be run by the Cushing House, the
same people that are running my adolescent program, and it will
provide educational opportunity and reconnecting to the
community.
But, importantly, the underpinning of that program is
really on getting people sober, getting them straight, in order
to provide that stability and that sense of community that
might have been disconnected during their incarceration.
And I am just wondering, from your experience, and you are
a very powerful example of the good that can happen, how
important is that?
I don't think this is just my district that is dealing with
the addiction problem. How important is that, do you think, in
the overall effort to help women transition out of
incarceration back into their communities?
Ms. Martin. I would say it is very important, because as I
stated earlier, a lot of trauma is what causes us to end up in
prison. The trauma leads to the drugs, which leads us to
prison.
So, it is very important that you have that aspect of the
transition. But if that trauma, that root cause, is not dealt
with, then the cycle will continue, the recidivism will
continue, and we will keep prisons running because people
aren't being given the resources that they are needing, which
is dealing with the trauma that is there.
And men have trauma as well, but there are no resources to
deal with any of that. Prison does not deal with trauma. Prison
adds to the trauma.
Mr. Lynch. Thank you.
Ms. Tran-Leung, I know you are doing great work over at the
Shriver Center. Again, on this issue of providing that support
to make sure we deal with the dual addiction that--in my
experience, it is, like, 90 percent of the prison population is
dealing with that, and if we don't get that right, it
diminishes our opportunities to do other good things.
But can you share what your perspective is from the Shriver
Center side of things?
Ms. Tran-Leung. Yes, thank you for the question,
Representative.
From our perspective, we probably have had less experience
in this space. But what I will say is that there is an
increasing recognition that housing is necessary for our
individuals and that housing is paramount to helping them to
address some of these broader issues.
And so, there has been a lot of really good work from HUD
recently to try to remove some of the drug-related restrictions
from the emergency housing vouchers, noting as of the fact that
addiction is often a root cause of homelessness.
Mr. Lynch. Thank you, Madam Chairwoman. I yield back.
Ms. Garcia of Texas. Thank you. The gentleman yields back.
The gentleman from South Carolina, Mr. Timmons, is now
recognized for 5 minutes.
Mr. Timmons. Thank you, Madam Chairwoman. And I would like
to thank my colleagues across the aisle for having this
hearing. This is very important, and currently in this country
we have 10 million jobs that are available, and if people want
to get back to work and are being prevented from doing so, we
need to take steps to make sure that they have the opportunity
to get back to work. That is the whole point of the criminal
justice system--there are two theories of justice: retributive
justice; and deterrent justice. If you have been released from
prison, if you have served your time, you should be able to get
back to work and pursue the American Dream just like everybody
else.
We have four proposals here before us. Two of them, I
think, could have bipartisan support. Two of them, I do not see
getting much bipartisan support.
There is one thing that I think that is incredibly
important that is not present before us here that would affect
this enormously, and that is the issue of expungements. We have
talked about it. I was a prosecutor for 5 years. I worked on
the expungement laws of South Carolina. One of the biggest
issues that is involved in the expungement conversation is the
cost of the expungement.
In South Carolina, it costs $285 to get your record
expunged, if you are eligible. I just did some research--
Kentucky, $500; Louisiana, $550; Tennessee $450. If you don't
have a job and you want to get a job, how are you going to pay
$200, $300, $400, $500, $600 to get your record expunged to
then get the job? It actually doesn't really make much sense.
I think that we could find a lot of bipartisan support
surrounding making expungements easier to get, payment for
expungements, and I really think that is an area on which we
should focus.
Mr. Korzenik, what are your thoughts on the subject?
Mr. Korzenik. I agree. I don't spend a lot of time focusing
on policy. My focus is, let's get the employers to see this
population as their future workforce, and then, I think, we
will get better policy support for things.
But expungement is very powerful. Clean slate type
initiatives where there is automatic expungement are
particularly helpful.
You need two things for this population to access: one,
money, as you have referred to if there is no automatic
expungement; and two, the sophistication to know how to tap
this resource. And these are all very, very helpful and would
help address our labor shortage in a meaningful way.
Mr. Timmons. To that point, I am going to ask a question of
Ms. Sorenson. A lot of these States are generating tens of
millions, hundreds of millions of dollars of revenue off of
expungement fees. That is why they have them. Theoretically, it
does require someone to actually assess an application, make
sure the person is appropriately eligible, and then process it.
Do we have any data or can you take a guess at what type of
hit it would be budgetary-wise to these States if the Federal
Government said, if you want this funding, you have to charge
no more than $50 for an expungement or, as Mr. Korzenik just
said, an automatic expungement?
That is going to have a cost. That is actually the hardest
one because not only does that remove their ability to charge
the fee, so they lose the revenue, but then they have to do
more work. So, that is probably the most expensive.
Ms. Sorenson, do you have any thoughts on that?
Ms. Sorenson. To your earlier question, I don't have the
background or history on the cost and the income that goes to
the States with respect to the expungement process. It is
something that we can look at and get back to you.
But I, personally, don't know what States are collecting in
terms of the funding for the expungement process.
Mr. Timmons. Sure. I will open it up.
Ms. Martin, do you have any thoughts on this?
Ms. Martin. I completely agree with what you are proposing.
It would make life much easier for those of us with criminal
backgrounds, but also I have no clue what the hit would be for
the State. But they are raking in enough cash through the
prisons not to really take too hard of a hit through the
expungements.
Mr. Timmons. Sure. There is not a lot of agreement in
Congress, but I think we could find some agreement on this
subject.
Yes, Mr. Korzenik?
Mr. Korzenik. I just wanted to mention that we should
offset these lost costs with the economic benefits. There was a
University of Michigan study which showed that people who went
through expungement saw a pick-up of income of about 20 or 25
percent over 2 years, an extraordinary pick-up in economic
benefits.
Mr. Timmons. And more tax revenue, because when you make
more money, you pay more taxes.
I also want to point out that we talked earlier about
marijuana, which is going to be a very big challenge in this
country. So many States have already legalized recreational or
medical marijuana, and it is going to be very difficult to
unwind this.
We have to address it, and the longer we wait, it is really
a disservice to the American people.
With that, I yield back. Thank you, Madam Chairwoman.
Ms. Garcia of Texas. The gentleman yields back.
The gentlewoman from Michigan, Ms. Tlaib, is now recognized
for 5 minutes.
Ms. Tlaib. Thank you so much, Madam Chairwoman. I am so
glad we are holding a hearing of this kind today, because too
many of my colleagues don't fully understand how broken our so-
called justice system is.
As we all know, it incarcerates people at a higher rate
than any other nation right now and, of course,
disproportionately targets our Black and Brown neighbors.
There is also this heightened level of dehumanization that
happens here. So, I just want to personally thank you, Ms.
Martin, for helping change that with your powerful voice.
We know that many leave prison already thousands of dollars
in debt, whether from conviction-related costs, missed
payments, prison charges, or child support, and often these
debts leave individuals unable to obtain a driver's license. We
talked about the ID required to open a bank account and so
forth.
Ms. Tran-Leung, what kind of credit score do returning
citizens have upon release, and do they typically have access
to consumer credit?
Ms. Tran-Leung. First, thank you for that question,
Representative.
One of the common barriers that we have seen from justice-
involved individuals, in addition to the fact of their criminal
record, is also the fact that they lack credit and that they
have not been able to accumulate a good credit score while
incarcerated.
And so, this is something that is definitely a barrier with
respect to housing, and I think one of the areas that we have
been trying to push back on is the need to really conduct these
type of screening requirements, especially after we have gone
through a pandemic, where people will have eviction records,
will have different things on their tenant screening, but where
the need for housing is especially important.
So, that is a very significant barrier for people, I agree.
Ms. Tlaib. I appreciate it.
And, Ms. Tran-Leung, as a result, justice-involved
individuals are 3 times as likely to use alternatives such as
payday loans or check-cashing services. Has your organization
looked at that impact of how that has led folks towards
predatory lending?
Ms. Tran-Leung. The Shriver Center itself has not, but I
do, at the Shriver Center, lead our legal impact network, where
we have a network of State-level law and policy organizations
that have done a lot of really good work around payday lending.
And so, that is something I am happy to get back to you on,
Representative.
Ms. Tlaib. Yes. I have a bill that reduces debt to be
reported on your credit report from 7 years down to 4 years,
and I really think that could be transformative for everyone
involved here, but especially around the country.
We know that a consumer credit report can determine a
person's ability to own their home, get a job, and even auto
insurance in my State.
In addition, prior to the COVID-19 pandemic, formerly
incarcerated persons faced a 27-percent unemployment rate in
the U.S., nearly 5 times higher than the national unemployment
rate.
Ms. Cook, I have admired your work and your leadership for
a very long time, and I appreciate you being here.
Could you talk a little bit about how poor credit can be
used, intentionally or unintentionally, as a proxy for being
formally--I call it a proxy to discriminate, especially those
who are formerly incarcerated? Can you talk a little bit about
that, and has your organization taken a dive into really
understanding that impact?
Ms. Cook. Absolutely, and thank you for that question. And
as I noted earlier, predatory lending and access to financial
services are really difficult for people with records. They
face a myriad of challenges when it comes to credit reporting,
when it comes to background checks that lock them out of access
to homeownership, being able to get mortgages, being able to
have jobs or hold jobs because of these barriers.
And so, we have recommended that Congress look at these
barriers and look at the Fair Credit Reporting Act and seeing
[inaudible] exist, and look at revising those limitations and
limiting any restrictions to people with records.
Ms. Tlaib. How can we reform our credit reporting system?
This is something you talked about, and I don't know if Marie
or any others on the panel--one of the things that I have been
looking at is, obviously, medical debt, because 90 percent of
folks who file bankruptcy in our country is due to medical
debt, and trying to prevent medically necessary debt from ever
appearing on people's credit reports, again, which has been
heavily used for all different areas--housing and so forth.
The University of Michigan did a study which showed the use
of credit scores actually in auto insurance, and how that has
kept people in the cycle of poverty, because they are paying
thousands and thousands of dollars even if they don't have DUIs
on their record, but somebody who has a better credit score
with a DUI is actually paying less. It just doesn't make any
sense.
And so I don't know, Marie or others, if you can talk about
any other bills. We have been working on the one that reduced
it from 7 years to 4 years, which we think would be truly
transformative and a compromise. But I would love to hear if
anybody has any questions, if the Chair would allow. Thank you.
Ms. Garcia of Texas. The gentlewoman yields back.
The gentlewoman from Pennsylvania, Ms. Dean, is now
recognized for 5 minutes.
Ms. Dean. Thank you, Madam Chairwoman, and I thank our
chairwoman and all of you for coming to us today to testify to
offer your important voices and your important experience.
Ms. Martin, I especially thank you for your eloquence in
everything that you have talked about.
I will start first with education.
Mr. Korzenik, in your testimony, you describe how
employment plays an important role in rehabilitation of
incarcerated and formerly incarcerated people. You also
describe how behind bars education programs are an important
part of this investment in employment.
Last Congress, I had the privilege of working with the late
Elijah Cummings to author a bill that would standardize the
Federal Bureau of Prisons' education programs by creating an
Office of Correctional Education focused on areas such as
literacy, getting a GED, post-secondary workforce training, and
more.
Would creating such an office and a set of best practices
across the Federal Prison Bureau help reduce barriers to
meaningful employment after release, and do you think it could
be replicated both at the State and local levels as well to
boost employment and, obviously, bring people back into
society?
Mr. Korzenik. First, thank you for your work on that, your
important policy work. Let me speak, most broadly, to the role
of education.
The RAND Corporation, the think tank, did a study of what
was most consequential in getting better employment outcomes,
and they found that education was the single-most critical
element.
Interestingly, it was not necessarily vocational
employment, vocational training, but actually hard-core
education programs. So, I think anything that encourages
education and makes an investment in this workforce--and it is
a workforce--would be beneficial.
Ms. Dean. I think that is really well put, and, of course,
vocational training is appropriate and useful. But you are
right, the key is a real education, regardless if you are
behind bars or not.
Mr. Korzenik. Some of that, if I may, is because it is
particularly true because of very low levels of educational
attainment in this group. So, that plays a role in making core
education.
The other thing I will say in defense of vocational
training is the study that RAND looked at was done at a time we
were losing manufacturing jobs in this country, and it wasn't a
prosperous area. I think redoing that might show some
additional benefits to vocational training.
Ms. Dean. Great points. Thank you.
I am going to shift now to housing and, particularly,
housing for those who are in recovery or those who struggle
with substance use disorder.
I am mindful that we are approaching the very end of
National Recovery Month, and we know that many of those who are
incarcerated or formerly incarcerated suffer from addiction or
substance use disorder.
I am especially concerned about how these people are
treated if they happen to relapse, which is a normal, sadly,
and common part of long-term recovery.
Ms. Tran-Leung, in your testimony you describe instances
where public housing authorities use broad discretion in
screening and denying applicants based on such things as prior
drug use.
For those who may be in long-term recovery and are at risk
of relapse, are they also at risk of losing their housing or
maybe at risk of never getting housing, based on addiction?
Ms. Tran-Leung. First, thank you for your question,
Representative, and this is a very significant problem that we
are concerned about is some of our laws around public housing
and access to housing are relics of the war on drugs, and as
time has gone on, we have learned that relapse sometimes is
part of recovery, and there have been some areas in housing
that reflect that.
I think some States and some places take a housing-first
approach, where it is necessary to house people and get them
the support before we start talking about recovery, and so
those are the type of policies for which we are hopeful.
But as things stand right now under the current laws,
people who are using drugs and have drug-related criminal
activity could be at risk of losing their housing or could be
at risk of being denied housing.
And so, the Fair Chance at Housing Act that is before
Congress helps to eliminate that and helps us to take a much
broader view and get rid of this relic of the war on drugs.
Ms. Dean. It is a relic.
And I thank you, Madam Chairwoman. We know that addiction
is a disease. It is not a criminal state, and we have to adjust
accordingly.
Thank you, and I yield back.
Ms. Garcia of Texas. The gentlewoman's time has expired.
The gentlewoman from Georgia, Ms. Williams, who is also the
Vice Chair of our Subcommittee on Oversight and Investigations,
is now recognized for 5 minutes.
Ms. Williams of Georgia. Thank you, Madam Chairwoman, for
recognizing me and for this conversation today.
Increasing economic opportunity for justice-involved
individuals is such an important topic to address. This
conversation must also include addressing the centuries-old
loophole in the Thirteenth Amendment.
When the Thirteenth Amendment to the U.S. Constitution was
passed, it outlawed slavery and indentured servitude except as
a punishment for a crime. This exception also appears in State
constitutions across the country.
Unfortunately, this loophole has meant that many prisoners
or justice-involved individuals are still working under
conditions of forced labor, getting little to no wages for
their work.
We should all be able to agree that slavery and indentured
servitude should not be permitted in any instance in this
country. What's more, when those currently incarcerated are not
fairly compensated for their work, they have an even harder
time reentering as productive members of society.
Fortunately, bipartisan supermajorities are starting to
eliminate this exception in their State constitutions across
the country. A whopping 80 percent of Utah voters approved the
change just last year. In 2020, Nebraska voters also approved
the change by over 68 percent. Colorado voters approved the
change by over 66 percent in 2018.
We need to learn from the successes at the State level and
mirror this change at the Federal level. I have introduced the
legislation to do just that with Senator Jeff Merkley.
Ms. Cook, if those currently incarcerated can work under
fair conditions, how would this help them to better access
capital to start their small businesses when they reenter
society?
Ms. Cook. Thank you for that question.
As I noted earlier, and as many of my colleagues have
noted, when someone returns from prison, they are trying to
start over. We have said that they have been rehabilitated,
that they have served their time. But when they come out, they
face barrier after barrier to being able to access the basic
necessities that each of us need to live our lives and enjoy
our lives.
And so, it is extremely important that we remove those
barriers to accessing employment, accessing housing, accessing
Medicaid and health care and other public benefits in order for
them to successfully reintegrate back into society.
And without the removal of those barriers, without removal
of barriers to debt, they are saddled with mountains of debt,
fines and fees that they must pay--without having access to
economic opportunity in order to pay those debts, in order to
access housing, in order to continue education, we will
continue to have the permanent underclass.
We will continue to see a cycle of incarceration and
reincarceration that Ms. Martin talked about.
So, it is extremely important that we look at this through
a holistic perspective and recognize that these things
intersect and work together in keeping people out of economic
opportunity and pathways to social inclusion.
Ms. Williams of Georgia. Ms. Cook, I want to specifically
talk more about the barriers to receiving and saving income to
help those currently incarcerated to become more familiar with
traditional banking services that they will need to utilize
when they enter society.
What is the impact of that, and what do you see our role as
the Federal Government in helping?
Ms. Cook. Absolutely. The fact is, when most people come
out, they don't have credit. They don't have much credit or a
credit history, and there are barriers to accessing traditional
financial services.
Many of them may not have ever had a bank account, may not
have ever engaged with banking services in the past, and so it
is important for us to support the work of nonprofit
organizations that are helping to bridge this gap, that are
helping to provide financial literacy and training and connect
them to financial services, but also for Congress to look at
its regulations and how those regulations also limit
individuals with records from accessing those services.
Ms. Williams of Georgia. Thank you so much, Ms. Cook. I
urge all of my colleagues on this subcommittee to co-sponsor
H.J.Res. 53, my legislation to eliminate the exception clause
for slavery in the Thirteenth Amendment.
Madam Chairwoman, I yield back the balance of my time.
Ms. Garcia of Texas. The gentlewoman yields back.
The gentleman from Massachusetts, Mr. Auchincloss, who is
also the Vice Chair of the Full Committee, is now recognized
for 5 minutes.
Mr. Auchincloss. Thank you, Madam Chairwoman.
First, I just want to say this has been just a terrific
hearing. I have learned more from these materials and from this
hearing, I think, than I have from almost any Financial
Services hearing to date, so thank you.
I wanted to zoom in on the safety versus justice paradigm,
Mr. Korzenik, that you put forward. You talk about a false
choice and a way of thinking that could, ultimately, undermine
progress on both fronts. And you have this really nice graph
here with public safety and restrictions and supervision and
how it is actually--you start to get diminishing returns by
going too far on restrictions and supervision.
What I wanted to ask you about, and then I want to let Ms.
Sorenson and Ms. Cook also weigh in is, as we are dialing back
restrictions and supervision and getting returns actually on
public safety, how are we measuring those returns on public
safety in a way that addresses people's concerns about
violence, especially as we are seeing gun violence actually
spike by up to 20 percent in some cities across the country?
Ms. Sorenson, I know that you said that what is keeping
employers up at night is not so much theft or fraud but
actually the threat of workplace violence, that they feel like
they owe their employees that security, which I can certainly
appreciate.
So, what are the restrictions and supervision that we need
to maybe actually dial up as we are dialing back others to
ensure that there is not going to be interpersonal violence in
the workplace or in our cities as we widen opportunity for the
formerly incarcerated?
Mr. Korzenik. One of the challenges in working in this
space is the lack of good data, and this was recently
highlighted--I know there is an op-ed in The Hill. I think it
was one of the principals at Arnold Ventures who talked about
this.
One of the best investments that, I think, could be made at
the Federal level is better data collection and more uniform
data collection. It is so complex because it is across all 50
States, sometimes even smaller jurisdictions, as well as the
Federal Government.
So part of the answer is, we don't really know.
Mr. Auchincloss. And by better data and what we don't know,
you mean the things that are predictive of future violence?
Mr. Korzenik. Data collection of what is actually
happening. We don't know a lot about outcomes. We don't know a
lot about--we don't have standard definitions of recidivism
versus rearrest, whether they are technical violations. Is it a
minor parole violation or something serious?
So, there is kind of a mess of a national data network,
which makes it harder. And the purpose of that graph that you
saw, which I used in my book and I stole shamelessly from my
own op-ed in the Tampa Bay Times which featured that, is to
kind of point out that there is this tradeoff where you can go
too far, and I think that is a political discussion where you
dial it back.
But what I was really trying to get to is more
restrictions, if it interferes with employment, as so many of
these restrictions do, are bad for public safety.
Mr. Auchincloss. Ms. Sorenson, do you have any thoughts on
what would be the criteria we would want to use to expand
economic opportunity, while still addressing the public safety
issues so that we do not have employers worried about workplace
violence, and we can ensure the public's safety?
Ms. Sorenson. I don't know that we can ever ensure that
employers will not be worried at all about workplace violence
as part of that hat that they wear as an employer. Likewise,
the same applies to landlords.
I think one of the key components here with respect to
background checks is understanding that it depends on the
particular facts and circumstances for the employer, for the
industry that they operate in, and for the positions that they
are filling, whether they are filling positions that have
access to vulnerable populations or consumer information and
how you use that information from the background check, based
on your industry, based on the positions being filled, and
access to people and information.
Mr. Auchincloss. Ms. Cook?
Ms. Cook. I think it is important that we look at safety
through a broader lens, and that we don't think about safety
purely as enforcement but we think about safety as addressing
causes of problems and how we address the underlying causes of,
``violence,'' and trauma is an underlying cause.
So, investments in social supports and investments in
social services that will help to identify the root cause of
the trauma, the root causes of violence, are critical in this
instance. And I also think it is important that we don't
blanketly limit access to employment for a person's background.
A person is better than the worst day that they have ever had,
and I think we have to remember that if we truly believe in
rehabilitation.
Mr. Auchincloss. Madam Chairwoman, I yield back.
Ms. Garcia of Texas. The gentleman yields back.
The Chair now recognizes herself for 5 minutes.
First, I want to thank the chairwoman for bringing together
all of these witnesses to talk about such a critical, very,
very important topic.
My district is 77-percent Latino. We are the fastest-
growing market in the United States. The Department of Labor
found that Spanish-speaking Americans are expected to account
for almost 65 percent of the labor force growth through 2029,
adding about 7 million new workers.
But despite this contribution to the labor market, there is
a growing body of evidence that background screening products
result in harmful discriminatory effects on Black and Latino
Americans.
This is a disturbing trend that has a significant impact on
families, access to housing, financial services, and other
essential capabilities.
In a Fair Housing Act and Fair Credit Reporting case, the
plaintiffs argued that a tenant-screening product, which
automatically disqualifies applicants, has an adverse impact on
Black and Latino applicants.
The National Consumer Law Center found that background
reports can contain a variety of errors, from a mismatched
name, including sealed or expunged records, and
misclassification of offenses.
What is even more concerning is a growing prevalence of
algorithm screening systems which take out any human
consideration in the process.
My question, therefore, is for Ms. Sorenson to begin. In
your testimony, you say that the Fair Credit Reporting Act
binds your members to use, ``reasonable procedures,'' to ensure
accuracy. What are these procedures, and how are your members
working to improve them since we, obviously, know that
sometimes they don't work?
Ms. Sorenson. The Fair Credit Reporting Act does require
reasonable procedures to ensure maximum possible accuracy.
Often, this involves linking an individual, the applicant's
information, to the information in the record that is found.
Typically, that is personal identifiers like the full name and
date of birth, as well as additional information like Social
Security number and address if that is available.
One of the significant challenges in our space is access to
personal identifiers in court records. We are seeing a trend
that exists within the Federal court records system, the Public
Access to Court Electronic Records (PACER), as well as in some
States to redact personal identifiers, namely and particularly,
date of birth. That is one of the most significant identifiers
used and is necessary to link a record to an individual, and
is, likewise, one of the current issues in our industry
impacting accuracy and the ability to match up those records to
people.
Ms. Garcia of Texas. Right. Are you able to distinguish,
for example--I believe one of the other witnesses mentioned in
her written testimony about the screening, the arrest screening
records, that it may say, ``arrest,'' but it doesn't say that
there was no final conviction.
Do your screening procedures include making a distinction
between arrests that occurred but not having a final
conviction?
Ms. Sorenson. When you pull a public record from the court
system, you would generally report the current status. So if it
is an arrest-only piece of information, that would be included.
It is ultimately up to the employer or property manager
whether they want to receive or see that information. There are
certain Federal and/or State laws and regulations that limit
the reporting of arrest-only information, and then, on top of
that, our PBSA members--background screening companies--can
further limit that information based on their client request.
Many proactively request to not see that information.
Ms. Garcia of Texas. Okay. This committee has looked at
consumer access to your credit reports and we have talked about
the difficulty some consumers have in correcting errors.
What is it that you all do to ensure that it is an easy
process, if you will, to correct errors that may be in your
screening procedures?
Ms. Sorenson. As a trade association, the Professional
Background Screening Association does not have consumer
reports. So, PBSA does not correct the errors.
Our members, however, are required under the FCRA to
reinvestigate any dispute that comes in at no cost to the
consumer. That, generally, is either a phone call, an email, or
some other communication from the consumer that launches that
reinvestigation dispute process.
Ms. Garcia of Texas. Okay. I will probably submit a follow-
up question to that for the record, because I see that my time
is expiring.
But it seems to me that you should have a process where the
consumer can more readily and accessively correct any errors
that may--because we are keeping people from housing, banking,
and so many other things that we need to figure out a way to
make sure they make the corrections quickly.
So, thank you for your testimony, and I would like to thank
all of the witnesses for their testimony today.
The Chair notes that some Members may have additional
questions for these witnesses, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
Also, without objection, I would like to enter statements
to the record from the Bank Policy Institute, the Chris Wilson
Foundation, the Collateral Consequences Resource Center, the
First Step Alliance, the National Association of Federally-
Insured Credit Unions, the National Employment Law Project, and
the National Low Income Housing Coalition.
The hearing is now adjourned. Thank you all for being here.
[Whereupon, at 11:55 a.m., the hearing was adjourned.]
A P P E N D I X
September 28, 2021
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]