Waiting For A Check To Clear Sucks. The Fed Wants to Fix That.

Many people have shared the experience of depositing a check and then waiting while it takes days to clear; the money is there, but not there.

For low-income people, that experience isn’t just annoying. It can also be a real financial hardship. Mismatches between available funds and expenses can create a spiral of bank overdraft fees and denied transactions, and the deeper in someone gets, the more insurmountable it can feel.

“It’s very embarrassing,” a commenter told TalkPoverty, describing a day of being hit with three separate overdraft fees while waiting on processing for a paycheck.

That’s something that could change as early as 2024 with a proposed real-time payments system recently announced by the Federal Reserve, America’s central bank. With FedNow, as it’s being called, funds could be moved any day, any time, nearly instantly.

The move is long overdue and has big implications for people who cannot afford to wait for a transaction to clear, such as the 1.8 million people earning minimum wage or less. A waiter making a tipped minimum wage, for example, can ill afford to deposit a paycheck and wait for it to clear with their rent deadline looming, and the technology already exists to fix the problem.

Real-time payments are used all over the world to move funds rapidly; they are a type of “faster payments,” which speed the payment process relative to the current standard, but they aren’t just faster. They are, as the name implies, virtually instant.

The United States, though, has remained stuck in the past with an outdated payments system created decades ago that doesn’t operate every day or at all times throughout the day.

In places such as Mexico, the U.K., Japan, Australia, and Turkey, both private firms and central banks own and operate faster payment systems — and in the U.S., a consortium of banks known as the Clearing House operates its own, called, creatively, RTP (for Real-Time Payments). RTP has been rolling out since 2017, and is open to all federally-insured financial institutions. The Clearing House claims RTP is active on 50 percent of direct deposit accounts in America, but the service’s initial customers were the same larger banks that make up the Clearing House.

These account for a large volume of American bank accounts, but a smaller segment of American banks; good for Chase, but perhaps not good for clients, especially since RTP controls pricing and access, potentially to the detriment of some users.

The Fed, building on the work of a task force formed to explore faster payments, wants to leverage its already extensive network of connections with banks, credit unions, and other financial institutions large and small. The goal is not to replace RTP, but to offer another option, and specifically a public one, which offers a net good and adheres to the government’s critical role in promoting fair access, pricing, and opportunity for all.

This is important because while the Clearing House has promised to hold rates steady, there’s no guarantee it will. Smaller banks are concerned about being cut out by what former Independent Community Bankers of America president and CEO Cam Fine described as a “monopoly.” Clearing House’s target date of 2020 for covering all direct deposit accounts in the U.S. is also likely unrealistic, while the Fed’s existing network and reach could make near-universal access much more logistically possible.

Fine notes that the Federal Reserve has been involved in payment processing for over 100 years; this is just another iteration of the central bank’s duties, a sentiment echoed by Chairman Jerome Powell.

Real-time payments can’t wipe out the payday loan industry, but they can take a chunk out of it.

Real-time settlement has big implications for businesses, especially small ones. But for low-income people, it could be transformative. Americans spend $24 billion in overdraft fees annually, some of which are driven by issues resolvable via faster payments; if there’s no lag between deposit and funds availability, there’s less likelihood of engaging in a transaction that will overdraw an account. If someone expects to get paid on Friday, the funds are instantly available, and they can pay their rent without worrying about a financial penalty.

People also spend about $7 billion on payday loans, which one in ten Americans have used. Real-time payments can’t wipe out the payday loan industry, but they can take a chunk out of it, since some of those loans are taken out in desperation by people who need money immediately, not after the time it takes for a bank to settle. Similarly, Americans spend approximately $2 billion cashing checks every year. That’s not just people who don’t have bank accounts; it includes people who can’t afford to wait for their accounts to clear.

That’s billions of dollars low-income people can ill-afford going into the pockets of companies with entire families of products built upon exploiting financial vulnerabilities.

Thomas Hoenig, former president of the Federal Reserve in Kansas City, former vice-Chair of the Federal Deposit Insurance Corporation, and currently a senior fellow at the Mercatus Center, notes that FedNow has another potential benefit as the system is built out: It could extend to other financial institutions such as remittance services. Immigrants sending money home through Western Union could therefore benefit from modernization to U.S. payments system, as a faster payments service in the United States can communicate with similar systems overseas, instantly transferring funds from senders to recipients.

Real-time payments will not fix issues like a federal minimum wage that hasn’t increased since 2009, repeated attacks on nutrition programs, and attempts at undermining unions. But they will help low-income people get, and move, their money faster, reducing the strain that comes from living paycheck to paycheck but not actually knowing when the funds in your paycheck will be accessible.

Mandy, a server living in the Boston area, became pregnant with her first child two weeks after enrolling in buprenorphine treatment, which consists of a medication that mitigates the cravings and withdrawal that result from opioid addiction. It was her fourth serious attempt at sobriety after 18 years of drug use that evolved from occasional lines of cocaine into an addiction to heroin, and eventually fentanyl.

Mandy had tried methadone, another medication similar to buprenorphine, three times unsuccessfully, but was determined to maintain sobriety this time. When she learned that she was pregnant, using again became a “hard no.” She enrolled in a comprehensive, high-risk pregnancy program geared toward people in recovery from substance use disorders.

There, she learned that due to a Massachusetts state statute requiring hospitals to report any prenatal substance use, she would be subject to a child services case once she had given birth. But she was assured that as long as she remained compliant with treatment and continued to prioritize her health and pregnancy, the investigation would be brief and relatively unintrusive.

That’s not how it went, though. Instead, she was charged with neglect and a placed on a statewide child maltreatment registry that would limit her job options and even her ability to attend field trips with her child.

Mandy was relatively lucky because she had the knowledge and resources to successfully appeal this decision, but many mothers who face similar circumstances are stuck living with the consequences of child welfare involvement simply for seeking treatment.

Media outlets have labeled the uptick in overdose deaths since 2015 the “opioid crisis,” and a rash of sensationalized stories — cops overdosing from contact with crime scenes, babies born “addicted” to drugs, drug dealers compared with serial killers — are fueling a public perception of drug users as a macabre and dangerous population.

The result? A crackdown on parents — especially mothers — who use drugs, with a hard target centered on those with a past or present addiction to opioids. State laws vary, but at least 23 states and the District of Columbia articulate that substance use during pregnancy is child abuse, and virtually every state in the U.S. will open an investigation (at the very least) into a person who tests positive for substances during or shortly after pregnancy.

According to research compiled by the Vanderbilt Center for Child Health Policy, the number of infants entering the foster care system rose by nearly 10,000 between 2011 and 2017, and at least half of those infant removals were due to parental substance use, often during pregnancy.

Not only can these types of punitive measures make pregnant people who use substances wary about seeking medical care, but applying personhood rights to the unborn is a dangerous precedent that criminalizes people for events outside of their control; for example, earlier this year in Alabama, Marshae Jones faced criminal charges for having a miscarriage after she was shot.

Women’s rights advocates continue to fight laws that pursue the rights of fetuses before those of the people who carry them, and have seen some wins — for example, the charges against Jones were ultimately dropped, and last year the Pennsylvania Supreme Court reversed a ruling against a mother who use opioids and marijuana while pregnant, stating that fetuses were not covered in their child maltreatment laws — but it remains an uphill battle around the nation.

At the same time, abortion rights are under fire. Fueled by the Supreme Court’s conservative majority, many conservative states are implementing laws that make abortions virtually impossible to access legally and safely. For example, Alabama’s governor recently signed into law a bill that holds doctors criminally liable, with a penalty of up to 99 years in prison, for performing abortions that are not medically necessary and also bans abortions at all points of pregnancy, even in cases of rape and incest. Georgia, Louisiana, Mississippi, Missouri, and Ohio also passed recent legislation banning abortions after six to eight weeks respectively, which is before many people even realize they are pregnant. Because habitual drug use can interrupt or alter menstruation, it can be even more difficult for those experiencing addiction to catch a pregnancy early enough to terminate it in one these states.

The concurrent rise of anti-abortion laws and punitive prenatal substance-use laws leaves people who become pregnant while having a substance use disorder — whether active or in remission — trapped in a dangerous situation that is often overlooked due to the stigma attached to substance use during pregnancy.

Any time we take a swing at so-called ‘bad mothers,’ it falls to the children.
– Richard Wexler

“Among people with substance use disorders, there’s no one more stigmatized than pregnant women,” said Stephen Patrick, a neonatologist and an associate professor of pediatrics and health policy at Vanderbilt University. He added that this pervasive stigma leads some people with substance use disorders to fear and distrust the medical community, even to the point of avoiding treatment.

Unfortunately, that distrust is often warranted. “Pediatricians often don’t know what they are required to do, and often states have a hard time interpreting what the federal government wants them to do,” Patrick explained. At the federal level, child welfare guidelines are vague and general, leaving states with broad discretion when it comes to defining child maltreatment and the subsequent responses. This means that when state or county authorities are misinformed about the reality of substance use and parenthood, that bad information can easily become codified into the system. Worse, it allows those policymakers determined to give the unborn personhood rights a means for policing the behaviors of pregnant people. “The end result is a system that in many cases over intervenes in some families that may be in recovery, and in other cases may not intervene when it needs to,” Patrick said.

Mandy’s story is just one example of the real-world impact of this stigma. My own life is yet another: I gave birth in 2014 while prescribed methadone. My daughter was hospitalized for neonatal abstinence syndrome, which is a common side-effect of appropriate methadone usage. She had no other health problems and, five years later, remains a healthy and developmentally normal child.

Nonetheless, a child welfare case was opened against me in the state of Florida. At the time, the case was deemed unsubstantiated — but four years later, a call by my mother-in-law to the Florida state child abuse hotline triggered another investigation. This time, the investigator made no attempt to speak with me before making her decision. She simply looked at my previous records of having been prescribed methadone while pregnant and filed to have my two daughters removed from my care. More than a year later, I am still fighting to get them back.

I love my daughters, and I have no regrets when it comes to birthing them — but I remember learning I was pregnant with my youngest less than a year after her elder sister was born. I was on a low dose of buprenorphine after having tapered from the methadone I began taking during my previous pregnancy. I had just finished grad school, and before entering treatment had been using heroin intravenously for nearly five years. My husband and I, both in recovery, were broke and sharing a mobile home with his parents in South Florida.

I became pregnant after being unable to access a timely refill on my birth control. Abortions in Florida are not covered by Medicaid. I didn’t feel ready for another child, but I had no way to finance an abortion. I don’t know that I would have decided to get one if I could have; that’s something I will never know, because it was a choice I simply did not have. Now, the same state that gave me no other options is withholding my children from me for having sought treatment for a medical condition.

No woman should feel compelled to terminate a pregnancy because she has a substance use disorder—but when jurisdictions withhold that choice, they force people who use drugs to suffer harsh punishments simply for becoming pregnant. Sometimes, that even includes jail time.

“In 2006, the Alabama legislature passed the chemical endangerment of a child law, and even though the legislation said this has nothing to do with pregnancy and drug use — it has to do with punishing adults who take children to dangerous places like meth labs — it was used as a basis for arresting pregnant women using any controlled substance, even if prescribed,” explained Lynn Paltrow, the executive director of National Advocates for Pregnant Women. This has led to the arrest or child welfare prosecution of thousands of women since it was implemented; in 2015, ProPublica identified 1,800 affected mothers. The law is still being used.

Both anti-choice activists and those who push for criminal or civil prosecution of pregnant people who use substances claim to be protecting children. But the reality is one of oppression and harm. “It is an anti-woman policy and an anti-child policy,” says Richard Wexler, the executive director of the National Coalition for Child Welfare Reform, of child welfare policies aimed toward substance use. “Any time we take a swing at so-called ‘bad mothers,’ it falls to the children.”

You see this in cases like mine; my judge doesn’t see my daughters crying every time I leave our once weekly supervised visit, nor does she have to answer their questions about why they can’t come home, but that doesn’t mean it’s not happening. You see this also in cases like that of Keri, a mother who I interviewed for a story I wrote for Filter Mag, who bought buprenorphine on the street and self-detoxed before giving birth to avoid child welfare intervention. A 2017 paper by Amnesty International reports that doctors across the nation are seeing substance-addicted people avoid timely prenatal care out of fear of prosecution, harming the very infants these laws claim to protect.

Across the country, harm reduction efforts are gaining traction, and the government is slowly increasing access to evidence-based medical care. But even while the general perceptions and treatment of people with addictions are advancing, pregnant people who use drugs continue to be stigmatized and punished.

Said Paltrow, “There’s no question that prosecutors and others have used the stigma and horrific medical info about the impact of controlled substances on pregnancy to establish in the law separate rights for fetuses, and anti-abortion principles that treat pregnant women like criminals.”

The Capital One breach announced recently compromised the data of 100 million Americans, which is nearly 40 percent of all U.S. adults. After the Equifax, Target, Home Depot, and Marriott hacks, it can be easy to shrug off the news of another leak, but one group of consumers is at particular risk in the Capital One breach: 80,000 Americans who applied for secured credit cards with the company.

The hacker, Paige Thompson, gained access to personal information such as income, address, and credit scores for seemingly all recent applicants to Capital One credit cards. For secured card applicants, who tend to be low-income, bank account information was compromised as well.

A secured card normally resembles other subprime credit cards — they still report to the credit bureaus, they still charge interest and late fees, and you can still default on the card if you don’t make your payments. But borrowers need to put down a security deposit in order to obtain one, which requires access to the borrower’s bank account information.

The fact that bank account credentials were compromised raises the stakes for those consumers: even compared to credit card fraud, resolving checking account fraud is no walk in the park, and the costs here will be borne by people who can’t afford to take a hit.

For consumers who don’t think they can get approved for a normal credit card, secured cards can be appealing. And who are those consumers? They don’t have a lot of money: Federal Reserve Bank of Philadelphia researcher Larry Santucci has found that the median income of secured card customers is $35,000, compared to $50,000 for Americans with unsecured credit cards.

Of course, given that these incomes are self-reported, and that credit card companies aren’t required to validate the income of all credit card applicants, this income data is almost certainly overstated: Plenty of people know they can get declined for a credit card for being too poor.

I worked at Capital One for five years, from 2013 to 2018. For a short stint during that time, I was in charge of the secured card product. I know most secured card customers are in no position to absorb a financial shock — and, unfortunately, having your checking account data leaked puts you in a much more dangerous position than a simple breach of your credit card number, or even your Social Security number.

If you apply for a Capital One secured card and get approved, you’ll initially be assigned a $200 credit limit, contingent on you sending in a security deposit of either $49, $99, or $200. The minimum security deposit you have to make depends on your risk as an applicant.

Think about that for a second: People are putting down a $200 deposit, to get a $200 credit limit, and the product makes money because people then borrow against their own deposit at a 26.99 percent interest rate — one of the highest in the industry — and get hit with late fees up to $39 when they fail to make payments on time. Santucci has found that only one in four secured card customers pays their credit card bill in full every month.

Some secured card customers are “new-to-credit,” but major banks such as Bank of America, Wells Fargo, and Discover have all been known to give out credit cards, at least with small credit limits, to people without credit history. If you’re new-to-credit but you have a checking account, and you also realize that your odds of being approved for an unsecured credit card are pretty high if you walk into a branch of your bank (of course, not everyone realizes this), you’re not likely to find a secured card attractive.

Your checking account could be emptied.

More commonly, secured card customers have low credit scores – the typical customer’s FICO is in the 500s — an obvious indication that they’ve struggled in the past to pay bills and to make ends meet. This condition can be temporary —your credit score might still be low even though your finances have recovered, since missed payments lower your credit score for seven years — but many Americans who struggle financially never achieve the stability they’d need to keep a high credit score. In a country where plenty of people live paycheck-to-paycheck, but only a third have subprime credit scores, secured card holders and applicants tend to be under real financial distress.

Because secured card applicants have to put down a security deposit, they’re not approved until they give Capital One checking or savings account information and their deposit is sent, unlike users of unsecured cards. This is what puts Capital One’s secured card holders at greatest risk after the breach.

To see why, it’s helpful to take a second to think about the exact ways in which a data breach comes back to bite consumers — especially given that you’re usually not on the hook for purchases fraudulently made in your name, whether someone has stolen your credit or debit card, or opened up an account using your identity.

Lose your credit card number, as in the Target or Home Depot breach, and you can usually resolve things with quick phone call to your bank if a fraudster makes purchases on your card. Lose your Social Security number and address, like in the Equifax breach, and someone can open up new accounts in your name, or take over your existing accounts by calling the bank, pretending to be you, and changing the contact information. Proving someone else did this can be anywhere from moderately to extremely time-consuming depending on your circumstances: it took reporter Phil McKenna a few days to clear things up, a typical amount of time for garden-variety identity theft, where you’re usually out time but not money.

But let’s consider what it will look like if someone uses the checking account information from a Capital One secured card customer to commit ACH (Automated Clearing House) fraud – using the customer’s checking account routing numbers and account numbers to set up unauthorized withdrawals, write counterfeit checks, or even pay off the fraudster’s own credit card.

If you’re a Capital One secured card customer, your checking account could be emptied. If you don’t notice what happened, you might try to make purchases and get hit with overdraft fees expecting money to be available that’s gone. Odds are very high you’re living paycheck to paycheck. Your Capital One secured card may have a limit as low as $200, and, across the industry, the typical secured card customer has only one credit card. If that happens, how are you supposed to buy groceries, bus fare, or diapers?

What’s known as Regulation E requires the bank credit your account within 10 days of when you notify them about fraud, unless further investigation is needed: a Capital One spokesperson told me they try to resolve most cases well under that limit, and said they refund any overdraft fees they determined occurred because of the fraud, whether it was the fraudulent transaction or a subsequent legitimate transaction took the account to a below $0 balance.

Everything depends on how quickly the customer notices something was wrong, how comfortable she is advocating for herself, and how equipped she is to go up to 10 days with nothing in the bank. Nearly 40 percent of Americans couldn’t cover a $400 emergency expense without borrowing money, even without having their checking account drained unexpectedly by fraud, and the typical secured card customer has no other credit cards.

Now, it’s completely possible that no actual fraud will occur as a result of the Capital One breach: in a statement, Capital One said that, based on the analysis they’ve done so far, they consider it “unlikely that the information was used for fraud or disseminated by this individual.” If they’re wrong, the consequences for secured card customers will be severe.

In this moment of crisis, it’s worth taking a step back to ask a broader question: are secured cards more helpful or more harmful to the low-credit score consumers they’re designed to serve? These products are often touted as a way to help people improve their credit scores, but there is weak evidence that they work for the typical customer. Santucci’s research shows that the median customer with a secured card sees only a 11-point increase in their FICO after two years, a number that’s dragged down by the 20 percent of customers who close or default on their cards within 24 months. 11 points is not a particularly impressive increase, especially given that if you wait and do nothing other than paying any existing bills on time, your low credit score typically goes up on its own as negative information on your credit report ages off.

Banks can tout that secured cards are free for customers who pay their bills in full every month, but the three-quarters of customers who carry a revolving balance are paying a high price for the privilege of borrowing against their own money, and would arguably be better off using their security deposit as an emergency fund. I’m sympathetic to what can feel like a double-bind to the banks: given that you need to charge higher prices to low-income customers to break even, is it better to be accused of ignoring them, or is better to be accused of exploiting them? If companies like Capital One can’t find better ways of serving low-income Americans, it won’t just be a breach of data: it will a breach of trust.

The arrival of the hot, heavy days of August means that, in many places, it’s time to think about back-to-school shopping. And thanks to the confluence of shrinking school budgets and the integration of more gadgets and gizmos into classrooms, the total that parents shell out to equip their kids is big and growing. The average household is expected to spend more than $500 this year on back-to-school supplies, an increase of several hundred dollars over the amount spent just a few years ago.

In an attempt to to give parents, particularly those with little disposable income, a break from those big numbers, many states in the coming weeks will turn to an old tax policy standby: sales tax holidays.

In 2019, 16 states have sales tax holidays planned, on which sales tax is waived or cut for a select group of items, most often back-to-school supplies or disaster preparedness goods ahead of hurricane season. The vast majority of them fall on either the last week of July or in early August.

The first such holiday took place in New York in January 1997, as a response to the fact that New Jersey levies no sales tax on clothing. Florida implemented a sales tax holiday the following year, and then Texas did the same the year after that. From there, their popularity grew significantly: 2010 was the peak year, with 19 states implementing some version of a holiday.

Today, these holidays are often promoted as providing a specific benefit to “hardworking” families and low-income people by lowering the cost of goods that have been deemed necessities. And as a bonus, local small businesses that have been hurt by the rise of internet commerce will theoretically see a jump in shoppers too.

But once you get past the self-congratulatory pablum of the lawmakers hyping these holidays, you see that they are much less beneficial for low-income folks than they appear.

The theory behind sales tax holidays is simple: Because the sales tax applies to everyone equally, and because low-income people spend most of their income, a suspension of the sales tax helps them more than it will a household that saves a large percentage of its income. Indeed, most states have tax systems that take more from the poor than the rich, with sales taxes largely to blame.

Sales tax holidays wind up hurting the poorest residents.

However, a sales tax holiday does little to change that equation for a simple reason: People with less money don’t have the ability to plop a whole bunch of it down in a store when a sales tax holiday comes along. When 40 percent of households can’t even access $400 in an emergency, it’s simply not an option to spend big sums in order to take advantage of a tax gimmick. This is the same reason that low-income families can’t just buy in bulk in order to save money on household goods: They don’t have the cash to fund larger purchases, even if it would be a cheaper approach in the long run.

Richer households, though, can do just that.

Per a 2010 study by the Chicago Federal Reserve, households with incomes under $30,000 and single-parent households derive essentially no benefit whatsoever from sales tax holidays. Instead, “the wealthiest households and households consisting of married parents and young children have the largest, statistically significant response.”

Sales tax holidays may even wind up hurting the poorest residents of a state because, to make up the lost revenue, governments wind up setting the usual sales tax rate higher than it would otherwise have been. And there’s some evidence that retailers game the tax holiday system too, marking up their products in the days before the holiday and then pocketing the difference when the sales tax is removed.

But the biggest problem is that a policy aimed at giving people a break ends up undermining the sort of programs and services that would actually help those same people far more. Altogether, according to the Institute on Taxation and Economic Policy (ITEP), states will lose more than $300 million in revenue this year due to sales tax holidays. And ITEP expects that total to increase as internet shopping becomes more prevalent in the coming years, because currently nearly every sales tax holiday applies to online purchases.

That’s $300 million that won’t be spent on health care, job placement, affordable housing programs, or schools. Money that could be spent on direct services is instead plowed into a bank shot tax break that can’t possibly help low-income people more than a direct infusion of cash or more social services would. Several states implementing tax holidays for back to school season – including Texas, Oklahoma, and Alabama – still spend less per student than they did before the Great Recession. Instead of sustained investments in the classroom or tax credits aimed specifically at them, low-income parents in those states receive a gimmick.

It’s not the case, of course, that there is no benefit to anyone from these tax holidays. But the cost is not in any way justified by the help provided. Putting more money into schools so parents don’t have to pony up for hundreds of dollars worth of school supplies would do more good over the long term than trying to boost pencil sales over one weekend ever will.

Richard McGary lost his home because he wasn’t able to clean his yard.

When McGary lived in Portland, Oregon, a city inspector decided he had too much debris in his yard and cited his home as a “nuisance” property under the city’s local nuisance ordinance. McGary, who was living with AIDS, asked volunteers from a local AIDS project to help. But before they could clear the yard to the city’s satisfaction, McGary was hospitalized with AIDS-related complications. His patient advocate informed the city that McGary was an individual with a disability and requested more time, but Portland refused. The city issued a warrant for violating the city’s chronic nuisance ordinance, and charged him $1,818.83 for the cost of clean-up. When McGary couldn’t pay, Portland claimed rights to his home — and forced McGary sell it to satisfy his debt to the city.

McGary is just one of many people with disabilities who lose their homes in the estimated 2,000 municipalities across the country with “chronic nuisance ordinances” (also called “CNOs” or “crime-free ordinances”), local laws that punish residents for behaviors the city decides are “nuisances.” Most encourage or even require landlords to evict tenants whose homes are declared a nuisance — and impose fines and fees on landlords if they don’t evict and the infractions continue. In some cases, like McGary’s, cities fine homeowners or place “liens” (a debt attached to a property) to “nuisance” properties, effectively forcing a cash-strapped household to sell their home.

Definitions of a nuisance vary widely, but they can include arrests occurring near the property; failing to mow your lawn or maintain your yard; or even calling 911 “excessively.” Broad definitions of “nuisance” behavior can sweep up behavior that simply reflects a tenant’s disability, such as being unable to clean your yard or calling 911 for medical aid. In communities around the country that have utterly failed to fund social workers, substance abuse treatment, or other resources for people to turn to in a crisis, calling 911 may be or seem like the only option — and in cities with chronic nuisance ordinances, they might be evicted for it.

When it comes to calling 911, the threshold number of “excessive” calls may be quite low — for example, in Bedford, Ohio, a property can be declared a “nuisance” after just two 911 calls. After a tenant called 911 twice in three months seeking help because her boyfriend was suicidal, Bedford declared her home a nuisance and fined her landlord. Her landlord began eviction proceedings shortly after. In another case, in Baraboo, Wisconsin, a mother called the police because her daughter was harming herself and posting suicidal comments on social media; police connected her daughter to a crisis counselor, but cited their home as a nuisance

We spent the past year analyzing police reports and call logs from Midwestern municipalities that use chronic nuisance ordinances. In city after city, we saw these ordinances had a severe impact on residents with disabilities, especially residents who called 911 for medical help because of a mental health crisis, substance use disorder, or a chronic illness. When a woman in Neenah, Wisconsin discovered that her boyfriend had overdosed on heroin, she called 911 in time for paramedics to administer naloxone, a medication that can reverse opioid overdoses, and save his life. But after paramedics reversed the overdose, police charged her boyfriend — who had been in treatment for substance use disorder — with possession. Because of the overdose and the possession charge, the city told the landlord the home was about to be declared a nuisance; the landlord issued a 30-day eviction notice against the woman and her boyfriend.

Chronic nuisance ordinances violate the ADA’s promise of eliminating state-sponsored discrimination.

These cases aren’t isolated. According to a lawsuit challenging a nuisance ordinance in Maplewood, Missouri, at least 25 percent of enforcement actions in the town were related to “obvious manifestations” of disability. For example, Maplewood declared a home a nuisance after a resident with PTSD and bipolar disorder called a crisis hotline and volunteers sent local police to her home. Ohio, which has the second highest rate of opioid-related deaths in the country, is another example. Police and paramedics are trained to carry and administer naloxone to combat a crisis that’s killing more people than the AIDS epidemic at its peak. But a study of four towns in Ohio found that, in every single one, more than one in five properties that were declared nuisances were marked because of 911 calls for help during an overdose.

These laws are bad news for other marginalized tenants, too. One study in Milwaukee found that nearly a third of nuisance enforcement actions stem from domestic violence, most often against Black women. And tenants of color are impacted most: the New York Civil Liberties Union found that Rochester, New York, issued nearly five times as many nuisance enforcement actions in areas of the city with the highest concentration of people of color as it did in the whitest parts of town.

The Americans with Disabilities Act bans state and local governments from denying people with disabilities the benefits of public services, programs, or activities. Courts have read the ADA’s sweeping non-discrimination promise to cover “anything a public entity does.” By punishing people for calling 911 during a mental health crisis or for being unable to clean their front yard — in other words, punishing them for a disability — chronic nuisance ordinances violate the ADA’s promise of eliminating state-sponsored discrimination. By attaching consequences like fines and eviction to 911 calls, towns and cities deter people with disabilities from accessing police and medical services (even though people with disabilities are paying for those services with their tax dollars) and again risk violating the ADA.

McGary, the Portland resident living with AIDS who lost his home because of a chronic nuisance ordinance, sued the city arguing just that — and a federal court of appeals agreed. Portland’s nuisance ordinance applied to everyone, not just people with disabilities. But when a law burdens people with disabilities more harshly than abled people, the ADA requires that cities and states accommodate those differences, including by making exceptions to generally applicable policies. The federal court found nuisance ordinances such as Portland’s would violate the ADA if the city imposed them neutrally, without making accommodations for the unique burdens they placed on people with disabilities. They can also violate the Fair Housing Act, which prohibits municipalities from adopting policies that discriminate on the basis of race, sex, or disability.

Portland won’t be the last city in court over its nuisance ordinance. This April, the American Civil Liberties Union sued Bedford, Ohio, arguing the city’s chronic nuisance ordinance discriminates against people of color, people with disabilities, and domestic violence survivors. New York’s state legislature just passed a law to bar cities from considering 911 calls as nuisances, largely because of nuisance ordinances’ outsize impact on survivors and people with disabilities.

Ultimately, repealing these ordinances would be a step towards ensuring that people with disabilities and other marginalized tenants have access to stable housing in their communities. Towns and cities should take chronic nuisance ordinances off the books — and if they don’t, civil rights lawyers might make sure they don’t have a choice.

Editor’s note: All names have been changed for privacy reasons.

Waiting For A Check To Clear Sucks. The Fed Wants to Fix That.

State Laws Punish Pregnant People Just For Seeking Drug Treatment

I Worked at Capital One. Hacks Like This Are Most Dangerous for Low-Income People.

Back-To-School Tax Holidays Are A Scam

Calling 911 or Not Mowing the Lawn Can Cost Disabled People Their Homes

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Get Talk Poverty In Your Inbox

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Get Talk Poverty In Your Inbox

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Get Talk Poverty In Your Inbox

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