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CFPB Report: ‘Criminal Justice Financial Ecosystem Exploits Families at Every Stage’: Finds ‘Products and Services Rife with Burdensome Fees and Lack of Choice’

by Chuck Sharman

A report released on January 31, 2022, by the U.S. Consumer Financial Protection Bureau (CFPB) shows the financial burden that falls disproportionately on poor families as a result of interaction with the private companies in the criminal justice system.

CFPB was created in the wake of the 2008 financial crisis to “promote fair, transparent, and competitive consumer financial markets”—characteristics that “seldom appear in the markets for products and services that capitalize off the criminal justice system,” it learned, not least because private firms “may enter into exclusive relationships with government actors, rather than competing on the basis of consumer choices.”

The report, Justice-Involved Individuals and the Consumer Financial Marketplace, describes impacts on the 6.5 million Americans incarcerated or under community supervision as of 2019. Moreover, with 10.3 million people booked into a jail or prison every year, one out of every three adults has a criminal record, burdening 77 million people and their families with the “collateral consequences” of interaction with the justice system, including loss of income and problems securing childcare or eldercare.

The report covers four broad findings:

1. Private for-profit companies have “become embedded throughout the system,” with a handful tending “to dominate each product or service area,” usually resulting in a shifting of “costs for essential goods and services to incarcerated individuals that institutions historically provided for free to them.”

2. With “little to no choice,” prisoners and their families are left to decide “between paying a private company that has a single-source contract with a jail or prison, or foregoing access to critical goods or services.”

3. A failure to pay “fines and fees” can force consumers “to choose between making payments they may struggle to afford and risking arrest, prosecution, detention, or reincarceration.”

4. Having a criminal record “creates barriers to access within the broader financial marketplace upon reentry.”

“Many incarcerated individuals and their families pay exorbitant fees for basic financial services,” noted CFPB Director Rohit Chopra, who said that the new report shines a light on the way “private companies undermine the ability for individuals to successfully transition from incarceration.”


Privately contracted firms running diversion programs, who are paid from court-ordered fees for participants, make “misleading claims” and even threaten “criminal prosecution for unpaid fees”—and that’s if someone can even get into one. Fees up to “$5,000 for a single offense” put them “out of reach” for many people. A 2015 CFPB enforcement action against one player, National Corrective Group, found that its employees “masqueraded as prosecutors and used deceptive tactics to intimidate consumers into paying hundreds of dollars in extra fees to avoid potential criminal prosecution.”

Then there is cash bail, which typically leaves the poorest behind bars for “50 to 200 days” while waiting for court dates, time they are absent from work and family and also at a heightened risk of injury, illness and death that accompanies incarceration. As a result, detainees and their families “are under great duress to accept any bail bond agreement to obtain release and may have little option but to enter an agreement with disadvantageous terms,” which is no doubt why CFPB counted 13,000 bail bond firms with a total annual revenue of $2.3 billion.

Private firms contracted to provide electronic monitoring also “extract substantial fees,” often using “threats of incarceration to collect aggressively from people struggling to pay.”

Even something as basic as the language in which a bond contract is printed can render its disclosures meaningless to someone not fluent in English.

During Incarceration

In addition to commissary items for hygiene and food, prisoners and detainees are also charged to communicate by phone or email. But with lockups contracting with single providers, there is no competition for an incarcerated person’s business, resulting in prices that “far outstrip the cost of calls on the regular market” for intrastate calls, which are not federally regulated, but which account for 80% of prisoner calls. [See: PLN, September 2021, p.12.]

The report also highlights the high fees charged by private firms to make money transfers to a prisoner’s trust account, a subject covered at length in Prison Policy Initiative’s recent report. [See: PLN, Mar., 2022, p.22.]

A related issue is the garnishment of funds in these trust accounts to pay court-ordered fees and sometimes even “room and board” at the jail or prison where a person is held. These “mandatory deductions,” which run up to 15% in Oregon and 50% in California, create the need for more and larger “external money transfers” just to give the incarcerated person “the same buying power.”

Upon Release

CPFB expressed alarm at the practice of returning a prisoner’s money upon release in the form of a pre-loaded debit card because it comes with “unavoidable” costs “whether due to use or inactivity” that “present a substantial financial burden for people reentering society.” [See also: PLN, Oct. 2021, p.28.]

In addition, most people are unable to repay debt while in prison or jail, especially child support, which cannot be discharged as easily as consumer debt. Left to accumulate until release, it saddles parents with an average of $20,000 to $36,000 in debt upon re-entry, the CPFB found.

Student loans, which are unavailable to prisoners from the federal government, also must be repaid if owed. As with other types of debt, though, CPFB found that programs available to pause or reduce the debt burden were confusing to navigate and frequently mismanaged.

Credit scores fall 50% on average while most people are incarcerated, though those locked up for lengthy sentences typically emerge “credit invisible,” CPFB found. Credit-related problems are difficult to address from behind bars, leaving some re-entrants to discover they have been the victim of identity theft. [See: PLN, Aug. 2018, p.18.]

Then there are all the ways the private financial system continues to punish people who have been incarcerated, with higher fees for low-balance banking and reduced access to credit or business capital. Employment discrimination also traps many re-entrants in low-wage work.

Criminal Justice Debt

By “imposing fees on the individual charged with a crime”—for “court operations, a court-appointed public defender, drug testing, prison library use, jail or prison room and board, and probation supervision”—the criminal justice system increasingly functions “less like a tax-supported government service and more like a municipal revenue generator,” the CPFB said.

Worse, “[m]any courts fail to consider an individual’s ability to pay when assigning” these costs. As a result, “up to 10 million people owe a collective $50 billion in court debt,” which cannot be discharged by bankruptcy.

Like debtors’ prison, which is supposed to be illegal, “criminal justice debt can nevertheless be a gateway back into the criminal justice system,” the report continued. Failure to pay income taxes or “non-criminal debt can also lead to incarceration.” A suspended driver’s license—which affects one in six Virginia drivers, for example—“can impede a person’s employment opportunities and thereby reduce their ability to pay debt.”

CFPB invites those “in contact with the criminal justice system” to share experiences with financial products and services using its “Tell Your Story” tool at or you can file a complaint with CFPB at PO Box 27170, Washington, DC 20038, or use the form on P. 41 of this issue. 

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