Research on Court Fines and Poverty Influences Latest Federal Reserve Survey

July 1, 2020

Imagine you get a speeding ticket, but can’t afford to pay the $230 in court fines and fees. Your license is revoked, but you still need to drive to the grocery store. You’re pulled over and charged with driving with a revoked license and failure to pay the original fines, thereby gathering more court fines and fees. Without money to hire a lawyer, you can be sent to jail. Your spouse has to quit their job to take care of the kids. With no income, you face eviction. The U.S. Supreme Court has held that the state may not “imprison a person solely because he lacked the resources to pay” for legal costs, but for many people, poverty is being criminalized (Bearden v. Georgia).

The Federal Reserve, the central bank of the United States, recently released the results of its seventh annual Survey of Household Economics and Decisionmaking, which included a new question based on research about court fines and fees by Professor Gene Nichol, Heather Hunt ’02  and students at UNC School of Law.

The survey measures the economic well-being of households and identifies potential risks to their finances, according to the Federal Reserve website. It includes questions on a range of topics about financial well-being including credit access and behaviors, savings, retirement, economic fragility, and education and student loans.

A question was added this year about debt that people accrue from fines and fees related to crime and the court system, due to Nichol and Hunt’s report “Court Fines and Fees: Criminalizing Poverty in North Carolina” (2017).

“It’s great that the Federal Reserve is now reporting these criminal justice measures,” says Hunt, social sciences research associate at the law school’s N.C. Poverty Research Fund. “Its findings provide precise numbers that simply weren’t available on a national level before. The incarceration rate and percent of families dealing with legal debt is staggering, and it’s so interesting to see the interplay between court debt and household financial stability generally. This survey shows that families struggling to pay legal debt are burdened in multiple ways, disproportionately carrying other kinds of debt too, I’m delighted we had some small influence on the decision to collect this data.”

According to the Federal Reserve report, six percent of all adults, and one-fifth of those who have had an immediate family member in prison or jail, indicated that their family had debt from court fines and fees at the time of the survey.

The survey and report were prepared by the Consumer and Community Research Section of the Federal Reserve Board’s Division of Consumer and Community Affairs.