CFPB Report Exposes Financial Exploitation in the Criminal Justice System

The report highlights lack of choice and burdensome fees at every stage.

On Monday, the Consumer Financial Protection Bureau (CFPB) released a report that exposes the financial issues that consumers experience when they come in contact with the criminal justice system. The review highlights burdensome fees and a lack of choice at every stage of the process. It also notes that the government is increasingly shifting the cost of incarceration to the families of the incarcerated.

Key Takeaways

  • A CFPB report finds that local, state and federal governments in the U.S. have exploited consumers who come in contact with the criminal justice system.
  • Crippling fees, fines and restitution are exacerbated by a lack of choice in products and services provided to families of incarcerated individuals.
  • The report also highlights that the cost of incarceration is being slowly shifted to families.
  • These financial burdens fall disproportionately on people of color, women and low-income families.

Report Shows Financial Burdens Ranging from Arrest to Incarceration to Reentry

The latest CFPB report uncovers the financial burden that families are forced to shoulder throughout the criminal justice process and how providers, which are often private companies, take advantage of the system to increase that burden.

The report highlights that interactions with the criminal justice system are common—a third of American adults have a criminal record. It then breaks down its findings into three main points:

  • High costs: Governments impose burdensome expenses on those who come in contact with the criminal justice system in the form of fees, fines and restitution. Refusal to pay often results in severe consequences, which may include arrest, detention, prosecution or even incarceration. State governments also rely on third-party debt collectors, which can impose their own fees and fines, which, if not paid, can result in incarceration.
  • Lack of choice: Government contracts in the criminal justice system eliminate competition, which is necessary to keep prices low. As a result, families of incarcerated individuals are forced to incur high fees if they want to send money to their loved ones. Additionally, people who are re-entering society have few or even no choices on how to receive funds they're owed on release, which can also result in high fees.
  • Shifting the burden: Governments are slowly shifting the cost of incarceration to the families of the incarcerated. This includes costs associated with court operations, public defense, drug testing, prison library use and probation supervision. They may also be charged for room and board and medical co-payments. Other costs are high because of government contracts that create a monopoly. For example, a 15-minute phone call from jail cost $5.74 in 2018. Wages for the incarcerated are often too low to cover these expenses, forcing the families to chip in.

The report focuses on how communities of color, women and low-income families are disproportionately affected by these costs. In particular, Black women sometimes spend up to a third of their income on these costs, forcing them to forego basic necessities for themselves.

The federal agency notes that it took action in October 2021 against financial services company JPay, which charged people transitioning out of the corrections system fees to access their own money on prepaid debit cards that they were forced to use. It also invited consumers to share their story if they've had experiences with financial products and services related to the criminal justice system.

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  1. Consumer Financial Protection Bureau. "CFPB Report Shows Criminal Justice Financial Ecosystem Exploits Families at Every Stage."

  2. Consumer Financial Protection Bureau. "Justice-Involved Individuals and the Consumer Financial Marketplace."