[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]