Back to Access to mainstream financial services, like a bank account, is critical to financial health and provides people with a safe way to store money, transact, pay bills, and build savings. But, being “banked” remains a financial health challenge for many. In 2019, according to the FDIC, more than 5% of U.S. households – 7 million people – were “unbanked,” meaning they had no checking or savings accounts.
Those involved with the criminal justice system face even more barriers to financial health. A survey of justice-involved individuals conducted by the Financial Health Network found a clear overlap between their lack of access to financial services and their involvement with the justice system. For example, nearly 30% of respondents indicated that they did not have a bank account prior to incarceration.
Lack of ID Is a Barrier to Being Banked
Our research found that the lack of access to a valid ID was a foundational barrier for individuals who were unable to open accounts at financial institutions post-incarceration. Since Alabama recently passed a law requiring the Alabama Department of Corrections (ADOC) to work with the Alabama Law Enforcement Agency (ALEA) to issue a non-driver state ID to all individuals leaving prison, we looked to that state as a testing ground. We sought to explore the connection between ID access and access to financial services for justice-involved individuals reentering society in Alabama. We also examined ways that actors within the government and nonprofit agencies, who serve Alabama citizens who were formerly incarcerated, can facilitate access to both valid IDs and financial institutions.
12.5% of Alabama households are unbanked and another 23.9% are underbanked, with people who were formerly incarcerated usually more likely to be unbanked.
While the law may make it clear that returning citizens in Alabama should receive an ID, creating new processes to provide these individuals with IDs is not guaranteed to be fast or easy. Additional pain points and challenges include:
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- Lack of interagency coordination and action is a barrier to returning citizens’ ID access.
- Improving the financial health of returning citizens requires actions at multiple levels and the participation of multiple stakeholders before and after a citizen’s release.
- Returning citizens may also distrust state and financial institutions, lack information about the value of ID and financial services, or have had their state ID confiscated when arrested without it being returned to the family or forwarded to the Department of Corrections to return it to the individual upon release.
Financial Health Needs of Returning Citizens
We’re aiming to improve access to safe and affordable financial services for justice-involved individuals by exploring solutions to achieve valid state ID access for all. To help us understand the issues from a local perspective, in partnership with the Alabama Appleseed Center for Law and Justice, we convened a group of Alabama stakeholders across sectors. All of these groups have a strong interest in confronting the challenges around obtaining a valid state ID and promoting access to safe, affordable financial services.
Bringing Financial Health Solutions for Returning Citizens to Alabama
In the first half of 2022, we will be engaging further with stakeholders in Alabama and funding projects aimed at addressing ID access challenges among returning citizens, with the end goal of improving financial health while empowering and lifting up the expertise of justice-impacted individuals. The projects we’re engaging with include:
Resource Manual & Training for Agency Personnel and Community Liaisons
This project will develop a manual for state agencies and local community-based reentry organizations to understand and meet the ID and financial service needs of individuals recently released from incarceration or on supervision. The manual will include steps for obtaining ID documents and identifying appropriate financial services resources. The grantees will then train a small pool of agency and organization personnel, as well as directly impacted individuals, to serve as community resource liaisons. A group of nonprofits, led by Greater Birmingham Ministries and with support from the Alabama Bureau of Pardons and Paroles, will lead this initiative.
ID System Mapping & Pilot Program
A group of Alabama agencies and non-government stakeholders will map out the current process of securing government-issued IDs for individuals who are incarcerated in Alabama. As part of the journey mapping, the grantees will interview justice-involved individuals about their lived experiences navigating the process of obtaining an ID. Building on this research, stakeholders will develop an improved pathway for individuals to secure IDs and then pilot this pathway with a population of 10-30 individuals who are incarcerated in a county jail, a youth correctional facility, or an adult correctional facility. Auburn University will lead this initiative.
Financial Services Exit Advocate Pilot Program
An exit advocate pilot program will test the effectiveness of providing justice-involved individuals who are nearing release with timely guidance on ID requirements and connections via BankOn to safe and affordable financial products. The group will collaborate with justice-involved individuals on supervision at Work Release and Day Reporting Centers to confirm receipt of necessary ID documentation prior to reentry. In addition, the program will provide financial resources and connect justice-involved individuals to financial products and services in their communities through a “soft handoff” to BankOn. A group, including reentry specialists Alabama Non-Violent Offenders Organization, a University of Alabama at Birmingham researcher, and the Alabama Asset-Building Coalition, will work on this with leadership and expertise from Restorative Strategies consultancy.
This fall, the team will be collecting and sharing learnings and next steps from this project. Our goal is to enable other policymakers and advocates in states across the country to use them in their work to improve financial health for justice-involved individuals.
If you would like to learn more about our processes, considerations, and partners, or to discuss the Collaborative, please email Amelia Josephson at ajosephson@finhealthnetwork.org.