Cities Addressing Fines and Fees Equitably (CAFFE)
With support from JPMorgan Chase and Co., the National League of Cities (NLC) Institute for Youth, Education, and Families launched an initiative that will provide grant funding and technical assistance to help cities assess the negative impacts of municipal fines and fees on residents’ financial health; and implement equitable collections strategies that help reduce debt.
Cities Addressing Fines and Fee Equitably Technical Assistance Project
NLC’s project on municipal fines and fees will focus on a six-city cohort, which will receive grants and technical assistance to assess their use of local fines and fees and develop collections strategies that incorporate financial empowerment interventions. NLC will draw lessons from its LIFT-UP program model to help these cities connect utility debt collection practices with financial empowerment services and thereby improve families’ overall financial well-being.
NLC will provide intensive technical assistance and peer learning opportunities to the six cities in the project cohort. Cities will be selected in early 2019 and the project will run through June 2020.
Cities participating in the project will receive support from NLC to:
- Assess their fines and fees structures within at least one of their municipal collections entities;
- Learn new ways to reduce inequities in how fines and fees are imposed; and
- Make program or policy changes that lead to a new collections model for the city, connecting residents in debt with services that improve their financial health
Cities will have the opportunity to learn from the experiences of the City of San Francisco’s Financial Justice Project, and their work to assess and structurally reform how fines and fees impact low-income residents.
Background on Municipal Fines and Fees
Whether triggered by courts, unpaid bills for city services, or other administrative actions, municipal fines and fees can impose a crushing burden on low-income residents. Aggressive debt collection practices can further exacerbate the financial strain on low-income residents. In many cities, unpaid fines and fees can quickly snowball, leading to escalated fines, driver’s license suspensions or even jail time – all of which further impede residents’ ability to repay by making it more difficult to maintain employment. These challenges often have a disproportionate impact on residents of color. Cities frequently miss key opportunities in their current approaches to fines and fees as well – residents who are unable to pay fines and fees often struggle with other debt and financial burdens and may not be aware of financial empowerment services available to them in their communities.
Even as cities turn to fines and fees as a revenue source, the costs of collections practices and incarceration for nonpayment can be very high. A 2015 report by the White House Council of Economic Advisors found that state and local governments have increased their use and size of fines and fees over the last decade and that using this method to raise revenue has been largely inefficient. In many cases, the costs of collection may exceed revenues from fines and fees due to the high direct costs of collecting debt and the low rate of collection.
Some cities have made significant progress in implementing programs that assist families in generating income and building financial security. However, the impact of such programs is limited when efforts to improve financial stability are disconnected from municipal debt collection practices. Connecting residents with outstanding fines and fees to financial empowerment services can help them pay back their debts and create a “win-win” scenario for cities and their residents.
For questions or more information contact:
Manager, Economic Opportunity and Financial Empowerment
(202) 626-3028 or email@example.com