Giving Compass' Take:
- Release card companies still make it difficult for previously incarcerated individuals to access their funds when leaving prisons and jails and re-entering society.
- There are steps that correctional facilities could take to address extractive practices in this industry, along with subsequent legislation changes to policies. How can donors address the various practices that prey on low-income returning citizens?
- Learn more about the financial knowledge that inmates need to reenter society.
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Every year, roughly 5 million people are released from jail and another half million leave prison. But just because they are released from physical custody doesn’t mean that they are free of the financial exploitation resulting from that experience.
When a person leaves a correctional facility, they often receive their funds — wages earned while behind bars, support from family members, or money the person had in their possession when arrested — on fee-laden prepaid debit cards. As we explain below, there are several ways (six, to be precise) to get money off of a release card, but they are expensive, difficult, or both.
We first put a spotlight on these “release cards” in 2015, when they came on the scene as one of the newer ventures from companies that have traditionally profited by charging incarcerated people and their families exorbitant rates for phone calls, money transfers, or other technological services. While release cards were novel in 2015, they are now ubiquitous. Since then, the Consumer Financial Protection Bureau (CFPB) has reined in some of the industry’s worst practices and cracked down on one of the biggest players in the industry, but these companies continue to line their pockets at the expense of low-income individuals who are trying to navigate the reentry process. As the CFPB’s director recently noted, some release-card companies have made a practice of “siphoning off…people’s own hard-earned money” through abusive practices that sometimes violate federal law.
To better understand how these companies continue to unfairly extract money from consumers — and more importantly, what can be done to stop them — we analyzed the most recent fee disclosures that release-card companies filed with the CFPB. The data (which are summarized in the appendix) paint a picture of a complex obstacle course, riddled with pitfalls that deprive formerly incarcerated people of the modest amount of money they have when they are released.
Read the full article about prison and jail release cards by Stephen Raher at the Prison Policy Initiative.