Dept. of Justice Issues Resources Related to Local Fines and Fees; Debt Collectors Should Review

Yesterday the U.S. Department of Justice issued a press release announcing a package of resources to assist state and local efforts to reform harmful and unlawful practices in certain jurisdictions related to the assessment and enforcement of fines and fees.

Per the press release, “The resources are meant to support the ongoing work of state judges, court administrators, policymakers and advocates in ensuring equal justice for all people, regardless of financial circumstance. “The consequences of the criminalization of poverty are not only harmful – they are far-reaching,” said Attorney General Loretta E. Lynch.

“They not only affect an individual’s ability to support their family, but also contribute to an erosion of our faith in government.  One of my top priorities as Attorney General is to help repair community trust where it has frayed, and a key part of that effort includes ensuring that our legal system serves every American faithfully and fairly, regardless of their economic status.”

The package, which was sent to state chief justices and state court administrators throughout the country, includes the following elements:

• A Dear Colleague Letter from the Civil Rights Division and the Office for Access to Justice to provide greater clarity to state and local courts regarding their legal obligations with respect to the enforcement of court fines and fees.  The letter addresses some of the most common practices that run afoul of the U.S. Constitution and/or other federal laws, such as incarcerating individuals for nonpayment without determining their ability to pay.  The letter also discusses the importance of due process protections such as notice and, in appropriate cases, the right to counsel; the need to avoid unconstitutional bail practices; and due process concerns raised by certain private probation arrangements.
• $2.5 million in competitive grants through the Bureau of Justice Assistance (BJA) to state, local or tribal jurisdictions that, together with community partners, want to test strategies to restructure the assessment and enforcement of fines and fees.
• Support for the National Task Force on Fines, Fees and Bail Practices, which is led by the Conference of Chief Justices and the Conference of State Court Administrators.  The task force is being funded by BJA and is also supported by the State Justice Institute.  The task force will draft model statutes, court rules and procedures, and will develop an online clearinghouse of best practices.
• A Resource Guide that assembles issue studies and other publications related to the assessment and enforcement of court fines and fees.  The resource guide, compiled by the Office of Justice Programs Diagnostic Center, helps leaders make informed policy decisions and pursue sound strategies at the state, local and tribal levels.

insideARM Perspective

At first blush this would seem to be a headline and story that has minimal implications for the ARM industry. However, since the recession numerous state and local governments have looked for ways to increase revenue. The collection of fines and fees has become a critical source of revenue for those government entities.

Additionally, many of those same government entities have made the decision to outsource collection efforts of fines and fees to third party collection agencies. As agencies have looked for new markets the collection of government debt has been seen as a market that is ripe to enter.

The end result is that any collection agency that collects of any type of government fines and fees should be aware of this announcement and thoroughly review the referenced Dear Colleague Letter and Resource Guide.