One of the most exciting things I’ve read recently in the A2J space didn’t come from the courts or legal circles. Instead, it involves research about how the financial industry creates barriers for justice-involved individuals.

The collateral consequences following involvement in the criminal justice system are enormous. Even after doing the time, the penalty for the crime follows far too many for eternity. Convictions make it harder to get jobs, find safe housing, open a bank account and participate in our democracy.

View the full ABA Foundation infographic here.

A life sentence to financial hardship shouldn’t be the price to pay for those looking to live on the straight and narrow.

An American Bankers Association group recently detailed how the financial industry continues to penalize individuals who have a record for various offenses. The report focuses in particular on how racial disparities persist post-incarceration.

In a whitepaper released Nov. 10, the ABA Bank Community Engagement Foundation defined the enormity of the problem and outlined how financial institutions can begin eliminating barriers to financial stability for millions of Americans.

Barriers include lack of identification, either primary or secondary forms, both of which banks require for opening an account. But the report notes that this requirement is often the result of long-established policies, not because of federal regulations. Yet, the report notes that only certain financial crimes create real barriers to opening bank accounts. And those crimes are relatively rare.

“While there may be a perception that justice-involved people are ‘banned’ from opening a bank account, the reality is most are in fact eligible to own an account,” the paper notes.

Another major issue involves fees and fines owed by those who’ve been sentenced or incarcerated. Plus, many who’ve been incarcerated end up being victims of fraud or financial scams, resulting in the extra hurdle of having to prove identity theft.

Importantly, this report identifies several ways banks can design and create new products from the point of view of the justice-involved customer:

  • Waiving consideration of past account mismanagement.
  • Making referrals to expungement programs.
  • Working with corrections institutions during work-release programs to enable check-cashing/banking options; automated deposit; and other payroll options that eliminate the need to rely on expensive third-party check-cashing operations.

The report spotlights several model programs, including one by the Bank of Hawaii, which provides saving accounts and basic check-cashing for individuals in work-release programs.

There are also examples of education programs and initiatives to support expungement.

The best part for banks? Not only can they help close the justice gap, their efforts help with employee morale and community engagement.

According to the report, “The banking professionals interviewed for this brief uniformly reported that their institution benefited from offering programs for justice-involved populations. Beyond the ability to help an underserved customer base, bank employees find the education and account support they provide makes them feel proud of their work and positive about their employer. Staff also report feeling strongly committed to this work — that it enhances the reputation of the bank as an institution and teaches them about the needs of people in their community in ways that enhance their ability to offer quality products and services.”


“Expanding Financial Services Access for Justice System-Involved Individuals Report,” ABA Foundation, Nov. 10, 2021