Helping prisoners get back on their feet financially
People in Aotearoa New Zealand are leaving prison with no banking services, making it more difficult for them to reintegrate into society, according to research from Te Herenga Waka—Victoria University of Wellington.
Victoria Stace, a senior lecturer at Te Kauhanganui Tātai Ture— Faculty of Law, was asked by FinCap (the umbrella organisation supporting independent financial mentoring services) to look into an issue that was repeatedly being raised by financial mentors working with prisoners.
“Financial mentors had reported that clients who were incarcerated had problems accessing and maintaining banking services. If a person had an account upon entering prison, it might be closed. If they wanted to open an account while in prison to enable receipt of money, this was difficult. And prisoners who came out of prison had problems opening an account,” says Victoria.
So she set about researching the law pertaining to prisoners’ access to banking services, and what could be done to make it easier for them.
“I’m not a criminologist—when I started this project I did not have a lot of understanding of prison systems and prisoner rights—but this issue clearly overlapped with my interest in consumer credit law,” says Victoria.
So with financial support from Te Herenga Waka, she took the project on, speaking to Corrections Ara Poutama Aotearoa, major banks, financial mentors, and other organisations working with people coming out of prison. Her research, ‘Paying the Price—A report into issues that prisoners face around access to banking’, was released in May 2023.
“It quickly became very obvious that prisoners face a range of issues around management of their financial affairs at different stages, including when they go into prison, during their incarceration, and when they’re released,” she says. “We ended up focusing on what happens when people come out of prison, when they often have real problems getting a bank account open.”
She says this problem is not unique to Aotearoa, with similar issues occuring in other countries, including the United Kingdom.
“It quickly became very obvious that prisoners face a range of issues around management of their financial affairs at different stages”
“In the UK there’s a very successful scheme whereby major banks help prisoners set up an account before they’re released—they’re assisted to get their ID sorted, their forms filled out, and their bank card ready to go, and they’re issued with it when they physically walk out the door.”
Victoria says the scheme is a relatively straightforward measure that would ensure people released from prison are set up to immediately start receiving a benefit or wages, but it’s not currently being done in New Zealand.
“You can’t do anything without a bank account—this is an essential service, so I do feel as though the major banks have a corporate social responsibility to provide a bank account to people coming out of prison. But that’s not currently mandated by the law.
“In fact, there’s only one bank in New Zealand—Westpac—that will currently entertain an application from someone who is still in prison,” she says.
“It’s great that Westpac offers the service, but constrained resources mean it hasn’t been taken up widely by Corrections. Most financial mentors we spoke to had no knowledge of its existence,” explains Victoria. “Also, the other major banks feel that because Westpac is offering that service, then they don’t need to do it themselves.
The problem with that, from a basic consumer perspective, is that it removes any choice about how these people bank their money.”
Victoria says it’s time for an overhaul of Corrections’ pre-release systems. Her report recommends that a formal programme be established that gives all prisoners who are incarcerated for six months or longer the opportunity to set up a bank account before release and have a financial health check on entry into prison with a view to lessening the financial impact of incarceration.
The next phase of the research will involve assessing the robustness of the report’s recommendations with key stakeholders, and then hopefully gaining support to help make the recommendations a reality.
“There are a whole lot of reasons why these recommendations are a good idea, not least because people who have already served their time in prison don’t deserve to be punished again,” Victoria says. “If we’re serious about helping people reintegrate back into society when they’re released from prison, it makes sense to make the process easier for them—helping them get a bank account is just one way to do that. It’s a simple service that makes a huge difference.”
This article previously appeared in V.Alum 2023.