People With Criminal Records Struggle to Get Bank Accounts
This week as we wait for the election results, we talk about the struggles of people who have served sentences to get basic financial services.
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Hi, Maitane! We’re still waiting for the election results to become clear and what they will mean for environmental and social policies in business. As we wait, let’s talk about a story that caught our attention this week: the struggles of millions of people convicted of crimes to get basic financial services.
That’s right. Even after paying their debt to society, the roughly 600,000 people released from prison each year in the U.S. find it hard to get a checking account and nearly impossible to get a loan.
That makes it even more difficult for them to get jobs, start businesses or find housing.
JPMorgan has promised to hire applicants with criminal records and other banks have pledged billions of dollars in loans and investment to minority communities, but there has so far been little attention paid to how ex-prisoners can get basic financial services.
It’s a difficulty experienced disproportionately by Black men, who are nearly six times more likely to be in prison than white men, the Bureau of Justice Statistics says. The U.S. Commission on Civil Rights also finds that people of color are more charged with nonviolent crimes like loitering and disorderly conduct and tend to get harsher sentences.
Having access to banking services may help keep former inmates out of prison. For example, Pennsylvania’s Department of Corrections said 73% of ex-convicts who stayed out of jail for three years had a bank or credit union account, versus 39% of those who went back to prison within three years.
These financial difficulties can make it harder for people convicted of felonies to regain their right to vote in U.S. states that take away that right. In Florida, those completing prison terms can’t vote until they pay their court fines and other obligations in their sentences, including restitution to victims.
Speaking of voting, let’s talk about the swings in the market we have seen as the tight race plays out.
After polls closed, we saw markets appear to price a win for the Democrats, writes The Wall Street Journal’s markets columnist James Mackintosh. The stocks of America’s biggest companies in the S&P 500 jumped while the price of government bonds fell.
Mackintosh says this signaled some investors expected a Democratic “blue wave,” leading to more government spending and debt. When Trump took the lead in Florida and expectations rose that republicans will keep control of the Senate even if Biden wins, markets swung again and treasury yields fell sharply. (Yields fall when bond prices rise.)
What am I looking at? The chart above shows the yield of the 10-year treasury note, which is investable debt issued by the U.S. government. The yield represents how much the bond returns on the investment when it matures after 10 years. Government debt from the U.S. and Germany are considered some of the safest assets. That is why changes in the yield curve help show how investors feel about the market and economy. Higher yields on U.S. 10, 20 and 30-year treasury notes generally means investors think the economic outlook is good.
We can probably expect more swings in the market as the election results near a conclusion. Now let’s open it up to our readers: Do you think banks should take steps to provide basic financial services to people with criminal records?
Share your thoughts below, email us or catch us on Twitter. Your words could appear in our next edition! Have a great week and remember to wash your hands. 👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music, skateboarding and yoga (but I’m bad at both). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy