Congress Has a Chance to Overturn Trump’s Rent-A-Bank Rule

In November 2019 — before quarantine, social distancing, and a year straight of unemployment insurance claims higher than the worst week of the Great Recession, back when the idea of paying millions of dollars for GIFs seemed unimaginable — the Trump administration’s Office of the Comptroller of the Currency (OCC) quietly introduced a new banking rule to circumvent dozens of state laws designed to protect low-income people from exploitation. The “rent-a-bank” or “fake lender” rule, as it’s being called, allows non-bank lenders (such as payday loan lenders) to launder their loans through nationally chartered banks in order to get around state interest rate limits. This rule, which went into effect in December 2020, upends almost two centuries of U.S. banking law and could trap millions in debt, unless Congress acts soon to overturn it.

Usually, people associate predatory lending with payday loans. And it’s common knowledge exactly how awful payday loans are: 12 million people84 percent of whom have family income under $40,000 — are subject to annual percentage rates (APRs) around 400 percent to borrow just a few hundred dollars. These rates trap borrowers in long debt cycles of constant loan renewals. The typical payday loan consumer will spend almost 200 days — more than half the year — in debt, and two-thirds will renew at least seven times, meaning they ultimately pay more in interest and fees than the original amount they borrowed.

Recently, however, there’s been a significant shift from payday loans to slightly bigger, slightly longer term installment loans. While payday loans are mostly under $500 with two-week terms, installment loans generally range from $500 to $2,000 (though they can reach $10,000 or higher) and offer terms of 6 months to 2 years or longer, with APRs around 100 percent to 200 percent. This shift happened quickly: One of the biggest predatory lenders, Enova International, made 98 percent of its revenue in 2009 from payday loans, but in 2019 only 10 percent came from payday loans compared to 43 percent from installment loans. Although the interest rates are slightly lower than payday loans, and consumers have longer to repay them, installment loans are actually more likely to trap people in dangerous debt cycles because they target the same low-income people but require a much bigger principal to be paid back.

There has been bipartisan legislation to curtail both types of predatory lending. Congress enacted the Military Lending Act in 2006 and expanded it in 2015 to protect service members — 44 percent of whom received a payday loan in 2017, compared to 7 percent of the total population. The bill capped rates on most consumer loans at 36 percent APR for active duty members, their spouses, and their dependents. Meanwhile, 18 states and DC, red and blue alike, have strong rate caps on payday loans that are extremely popular. (Illinois’s House of Representatives actually approved their payday rate cap unanimously, and Nebraska passed theirs with 83 percent ballot approval.) In addition, the vast majority of states have rate caps on at least some installment loans. Forty-five states and D.C. set interest for $500 6-month loans at a median APR of 38.5 percent; 42 states and D.C. set interest caps on $2,000 2-year loans at a median APR of 32 percent.

Predatory lenders want to circumvent these state laws to charge obscene interest rates on Americans everywhere, and the Trump administration was more than happy to draft a new rule that makes that possible. The rent-a-bank rule works as follows: The consumer applies for a loan with the non-bank “fake lender” like Ace Cash Express or OppLoans, which processes that application and sends it to an actual bank. The bank sends money to the consumer and then sells the loan back to the fake lender in exchange for some of the profit. Finally, the consumer pays back their loan to the non-bank lender. The consumer only ever interacts with the “fake lender,” but since the bank technically originated the loan and isn’t subject to the same state interest rate restrictions as non-bank lenders, the fake lender doesn’t have to abide by the rate cap anymore either.

Predatory lenders have been trying to use this rent-a-bank scheme to evade fake lender and anti-usury laws as far back as the early 1800s, but courts and federal regulators have always found it to be illegal. Until the Trump administration reversed course and implemented the new rent-a-bank rule. Now, 42 states and DC currently have at least one predatory lender using a rent-a-bank scheme, and another five have high-cost installment lenders that lend directly to consumers.

A $2,000 2-year installment loan would cost $7,960 in fees.

The costs of this rule to individual people and families will be enormous. In a state like Iowa, where rates are capped at 36 percent for both $500 6-month loans and $2,000 2-year loans, a $500 6-month installment loan from Check ‘N Go that a borrower is able to fully pay after the first term would cost $90 in fees at the 36 percent APR.  But under the new rule, Check ‘N Go is able to charge 199 percent APR on the same loan, which would cost $497.50 just in fees. Similarly, a $2,000 2-year installment loan repaid after just one term would cost $1,440 in fees at a 36 percent APR but $7,960 in fees at 199 percent APR.

And this example is assuming that borrowers are able to pay off the loans when they’re due, instead of renewing them, which is much more common. After six renewals, that 2-year installment loan at a 199 percent APR will cost $47,760 in fees.

This isn’t just a hypothetical exercise. About 19 percent of the 53 million adults in the US with household incomes under $40,000 will take out a payday loan sometime during the year, and most will end up renewing so many times that they pay more in fees than the principal they originally borrowed. If that percent holds across the states, as many as 4 million adults every year will take out a payday loan in a state where anti-predatory lending laws are being undermined by the rent-a-bank rule.

To add insult to injury, while these non-bank lenders profit by preying on millions of desperate Americans, they’re also demanding special support from the government during the pandemic. When the Paycheck Protection Program (PPP) was created in March 2020 as part of the CARES Act, payday lenders and their ilk were initially excluded. The lenders threw a tantrum, suing the government for inclusion and convincing a number of lawmakers from both parties — who happen to have received 6 times more in campaign contributions from the payday industry than those not involved — to write a letter urging the Trump administration to provide them with PPP funds, which it ultimately did.

At least 35 payday loan and debt collection companies received between $9 billion and $23 billion in PPP loans

As of July 2020, at least 35 payday loan and debt collection companies and their subsidiaries had received between $9 billion and $23 billion in PPP loans. Meanwhile, they continued to charge low-income consumers 400 percent APR on short-term loans amidst a financial crisis. Some even had the audacity to market “COVID-19 Financial Relief” and “Emergency Funding Relief” loans at 800 percent APR early in the recession. One company, Opportunity Financial — which operated under the name OppLoans but recently rebranded as OppFi — lends directly in 10 states and uses a rent-a-bank scheme in 33 other states to lend at 160 percent APR. OppFi has received 46 complaints to the Consumer Financial Protection Bureau (CFPB) for their payday lending practices since 2011 and is currently being investigated for potentially violating the Military Lending Act, but last year they took a PPP loan of $6,354,000. Another predatory lender, CashCall, has received a staggering 565 complaints to the CFPB and was successfully sued in separate cases by the CFPB and DC for using a rent-a-bank scheme to charge illegally high interest rates, but still received a PPP loan of $788,600.

The good news is that there are some easy fixes to this problem. In an ideal world, we would have a national 36 percent rate cap that applies to everyone. At 36 percent APR, consumer loans would still be pretty costly but wouldn’t be at predatory usury levels. The bipartisan Veterans and Consumers Fair Credit Act introduced by Representatives Jesús “Chuy” Garcia (D-IL) and Glenn Grothman (R-WI) in November of 2019, and which is expected to be reintroduced this legislative session, would extend the Military Lending Act’s 36 percent cap to all consumers. This would be overwhelmingly popular with the American public, polling at 70 percent among all voters with no less than 60 percent support in any state and with a majority of those opposed saying that 36 percent is still too high. However, given the makeup of the Senate, this legislation is unlikely to pass, and certainly not quickly.

Waiting for a new comptroller of the currency to be appointed by President Biden and then issue a new rule reversing the rent-a-bank rule will also take some time and could face a threat from lawsuits in a very conservative federal judiciary. In the meantime, millions of low-income consumers will be robbed of billions of dollars in fees from exploitative interest rates.

The much faster and easier solution to the rent-a-bank problem is for Congress to simply use the Congressional Review Act (CRA) to overturn the rule. This option is time-limited, though; Congress has just 60 legislative days after a rule is implemented to pass CRA legislation. Thankfully, Representative Garcia (D-IL) and Senator Chris Van Hollen (D-MD) and Senator Sherrod Brown (D-OH) took the first step on Thursday March 25 and introduced the necessary CRA legislation to repeal the rent-a-bank rule.

The resolution now needs to pass both the House and Senate and get signed by President Biden soon, likely sometime in May, to prevent millions of low-income people every year from being even further exploited and trapped in debt by predatory lenders.



Infrastructure on Reservations is Falling Apart

As nurse Trudy Peterson drove from her home in Mobridge, South Dakota, along Highway 1806 in July 2019, rain pounded Standing Rock Reservation’s flat, barren landscape. A massive seven inches of rain fell overnight and as she approached a straight stretch of road just south of Fort Yates, disaster struck.

Powerful floodwaters had destroyed a culvert running under the road, washing a 30-foot section of the highway away. Peterson, 60, drove straight into the ravine and was killed — one of two people to lose their lives there that night. Two other motorists were injured.

“We have other culverts like that that are going to be blown out if we get a bunch of rain,” warned Elliott Ward, the Standing Rock Sioux Tribe’s emergency manager, from his office in Fort Yates. “(R)oads, bridges, culverts, lagoons, housing. Our infrastructure is shot,” said Ward. “A lot of our roads were built back in the ‘50s and ‘60s; they’re dilapidated and need replacing.”

Tribe administrators on Standing Rock Reservation say having an array of departments and authorities — state, federal, and tribal — in charge of roads and transport infrastructure means that accessing funds to maintain highways and culverts is complicated and riven with bureaucracy. Most federal funding for roads and highways on reservation lands is provided through the Tribal Transportation Program (TTP), which authorized $505 million for 2020 and is co-administered by the Bureau of Indian Affairs and the Federal Highway Administration.

But reservations across the U.S. have a backlog of infrastructure projects, a delay referred to as “deferred maintenance.” Repairs were estimated at $390 million for 2018.

Indigenous communities are some of the poorest in the country. The per capita income in Standing Rock’s Sioux County stands at less than $16,000, according to the U.S. Census Bureau, while in Emmons County on the other side of the Missouri River, the figure is almost double that.

In Navajo Nation, home to around 175,000 people spread across New Mexico, Utah, and Arizona, three-quarters of the roads on the reservation are either dirt or gravel. In an area larger than the state of West Virginia, drainage systems are easily clogged by expanding and migrating sand dunes, making roads impassable during times of heavy rain or thawing. In 2015, ten days of school in the reservation’s San Juan County were canceled because road conditions made it unsafe to ferry students to and from their classrooms.

In South Dakota’s Cheyenne River Sioux Reservation, not far from Standing Rock, federal funding for the community’s 310 miles of roads was just $2.2 million in 2019, one tenth of the estimated minimum needed to bring the roads into good repair. Road ploughing alone cost $600,000 that same year, when a combination of failing infrastructure and extreme weather led to a state of emergency being issued by tribal authorities on two occasions.

Dirt roads in poor condition are a growing problem in the era of climate change, with record-breaking late summer and early winter storms and snowfall that have made it even more difficult for residents to get around. In March 2019, a “bomb cyclone” storm flooded homes and businesses on Pine Ridge Reservation in South Dakota, home to some of the lowest life expectancy rates in the Western Hemisphere. With the ground underneath still frozen solid, rapidly rising temperatures that followed the snowstorm fueled a thaw and several-feet-high floodwaters left whole communities stranded for days.

For vulnerable minorities such as Native communities, the threat presented by the coronavirus has added to the worry. With Covid-19 cases rising in states across the Plains region, being able to safely drive to healthcare and emergency facilities is more critical than ever. Those drives can be long. In Navajo Nation, for example, 12 health care facilities cover 25,000 square miles of land. Early last summer, Navajo Nation reported a higher per capita number of Covid-19 cases than New York state, ground zero for the outbreak last spring. Meanwhile, lost with the passing of 1,152 members of Navajo Nation are generations of the same families and coveted oral histories.

Dirt roads in poor condition are a growing problem in the era of climate change.

The culvert under Highway 1806 into which Trudy Peterson’s car dived in the summer of 2019 wasn’t repaired because it fell into the “long-range projects and costs list” in the Tribe’s Long Range Transportation Plan for Standing Rock document, published in December 2018. It meant there wasn’t funding set aside to repair the culvert, estimated at costing $1.5 million, or it wasn’t considered high priority at the time. The shortfall facing Standing Rock, according to the Tribe’s director of transportation and planning, Ron His Horse Is Thunder, is down to Congress and the Federal Highway Administration not releasing enough funds. “We go to Congress every year,” he told the Associated Press in August 2019. “They just don’t give us enough money to take care of the issues.”

Nor could the tribe, says Elliott Ward, avail itself of funding from the Federal Emergency Management Agency (FEMA) to repair the highway, as it comes under BIA jurisdiction. The culvert that killed Trudy Peterson had been identified for replacement seven years before it was washed out, according to an internal document.

Recent months saw some efforts in Washington DC to help ease the crisis. In August 2020, then-Representative Deb Haaland (D-N.M.), now Secretary of the Interior Department — and the first Native American to hold a cabinet position — spoke of how the Invest in America and Moving Forward Acts would result in funding increases for the TTP. In November 2020, four senators including Elizabeth Warren introduced legislation that would send funds toward infrastructure improvement efforts, including traffic calming and pedestrian facilities on reservation lands. The bill would have seen the opening of a new program within the Department for Transportation with an annual budget of $25 million. It has not been reintroduced in the 117th Congress.

But throwing money at the problem isn’t a catch-all solution. Interjurisdictional cooperation is key to determining how roads and road safety are managed in many reservations, says Kathy Quick, a co-author with Guillermo Narváez of a University of Minnesota study about improving roadway safety on reservations. “Matters of responsibility and authority — who has it and who may exercise it — are frequently in question and contested in most reservations,” she said.

“The boundaries of reservations and of tribes’ jurisdictions to formulate, implement, and enforce safety-related policies and plans are frequently questioned and contested by federal, state and local government authorities.”

For Trudy Peterson’s daughter, Jade Mound, those issues don’t compare to the raw pain of losing someone to poor road conditions. “I don’t want anyone else to have to go through what my family has gone through,” she told the Bismarck Tribune in September 2020, when Peterson’s and other families filed a claim against the BIA seeking monetary damages and better maintenance of roads.

“There is absolutely no reason that the BIA roads should be in the condition they’re in.”


First Person

1 in 6 Millennials Have Crowdfunded a Funeral. I’m One of Them.

The day after my dad died unexpectedly of a heart attack at age 60, I found myself in a nearby funeral home, staring at the handwritten, folded letter I’d written for my dad as a polite funeral director discussed options with me and my wife. Did we want jewelry made with my dad’s fingerprint on it, an upgraded casket for his cremation, or a selection of candles with his face on them? I want to know how much this will cost, was the terribly practical thought I kept returning to. I hadn’t had time to process my dad’s sudden death, sixteen years after my mom died from a stroke. I’d had a single blurry day to come to terms with my dad’s death and take responsibility as his only surviving next of kin, with no parents, grandparents, or siblings to help me out.

Fortunately, I knew my dad’s wishes from dozens of conversations: Spend as little on his death as possible, have him cremated without embalming, and spread his ashes at Ossipee Lake in New Hampshire where he spent every summer as a kid. I tried not to feel guilty as I turned down the options the funeral home director explained to me, picturing my dad’s blue eyes as he told me not to spend an extra dime on his death, his insistence that he wanted to keep this simple. I knew my mom’s funeral costs had been impossible for him to handle as a cab driver, and that her brother had paid for almost everything.

After a lengthy and transparent explanation of what was available, I was handed a breakdown sheet with itemized prices. In total, my dad’s cremation costs sat at around $3,700: $2,900 for professional services and basic cremation, $260 for a container to keep his ashes in, $84 for copies of the death certificate, $31 for a cremation permit, $260 for the crematory, and $200 for the medical examiner fee (which went up by 100 percent in Massachusetts in 2019). My wife and I put the cost on a credit card and went home, exhausted.

I grew up in the projects, and lived just above or at the poverty line for the first eighteen years of my life. My parents, like 40 percent of Americans, never had $400 in the bank for an emergency. When my dad received medical bills for things that MassHealth didn’t cover, he let them go to collections because we simply couldn’t afford to pay them. Just a few years ago, my wife and I were in a similar boat. If my father had died in 2016, neither of us would have had a single credit card with a high enough limit to pay for his cremation costs.

My dad’s death was the second expensive emergency we faced in 2020, a year where nearly ten months were spent in an unprecedented global pandemic. In May, we had to pay for our cat’s life-saving cystotomy. I remember how relieved I was when we paid off the credit card we used for her surgery about a month and a half after it happened.

Death shouldn’t create an unmanageable financial burden.

About a week after my dad’s death when the shock wore off, I decided to start a fundraiser to cover the cost of my dad’s cremation. According to GoFundMe, 13 percent of its campaigns created in 2017 funded memorials, and a 2015 Funeral and Memorial Information Council study reported that 17 percent of adults between 20 and 39 solicited or donated money online for funeral-related arrangements. Sites dedicated specifically to funeral and memorial costs have launched, such as FuneralFund and Ever Loved. A 2019 survey from the National Funeral Directors Association showed that the cost of cremation had gone up 8.5 percent in the U.S. over the last five years, and the median cost of direct cremation is $2,495. The median price for a full funeral and burial in 2019 was $9,135, adding to the stress for the deceased’s next of kin. All of this is an even greater financial and emotional strain during a global pandemic, when many people have lost income and while low-income folks, people of color, and disabled people are dying at higher rates due to complications from COVID-19 compounded by racism, classism, and ableism in medical care.

Based on the 4.9 percent fee deducted from each donation at Fundly, I set my fundraiser at $5,000, hoping to raise enough to cover paying off the credit cards before any interest accrued plus a little extra to cover the cost of traveling to Ossipee for the weekend to spread my dad’s ashes once it’s safe to actually memorialize him.

As I shared my fundraiser on social media, I wondered if my dad’s wishes were simply because he didn’t believe much should be spent on death or because he understood that cremation and funeral costs can be pricey.

I thought of my dad, grieving my mom and unable to help pay for her funeral expenses, cutting back his hours at work because he had to take care of me full-time. I thought of him calling me the first time he qualified for a secured credit card after years of financial instability. I thought of my dad giving me and my wife a “mini honeymoon” weekend trip for our wedding because we couldn’t take enough time off to go on a full honeymoon right away, of him buying us dinner and champagne for our first anniversary, of the way he used to stop by and bring us desserts from an Italian bakery in Boston just because he could finally afford spontaneous gifts. My dad was financially secure for the last three years of his life, and he spent most of it in generous ways, helping residents at his sober home pay their rent and paying for aquarium memberships for the toddlers in our family.

Within two weeks, my fundraiser was fully funded, and we could pay off the credit card with zero interest. I almost cried when I saw the fundraiser total amount.

The fact that paying my dad’s cremation costs came down to luck and privilege isn’t lost on me. On average, only 22.4 percent of crowdfunding projects are successful and meet their goal, and 24 percent of Americans don’t have a credit card. There isn’t much support out there for young or low-income people shouldering the cost of a loved one’s end-of-life costs alone, aside from crowdfunding and asking for help from friends and family, if that’s even an option. Death — especially an unexpected, sudden loss — creates a seismic shift in your world, but it shouldn’t create an unmanageable financial burden.



Solar Power Cuts Energy Bills, But Few Low-Income People Have Access

It was about a decade ago that Boston resident Natalie Jones first began to dream of putting solar panels on her roof. She was amazed, she said, that there was a technology that could help people save money and improve the environment at the same time, and she wanted to be part of it.

At the time, however, home solar was something only the affluent could afford. A modest 5-kilowatt system would have topped $30,000 in 2011, according to the National Renewable Energy Laboratory. Within a few years, prices had fallen and solar companies were making aggressive sales pitches in her neighborhood. Still, the numbers didn’t work for Jones, who was a full-time student working as an educator in a women’s homeless shelter.

“I couldn’t lay down thousands of dollars for the panels,” she said. “I couldn’t get in the game with a big check.”

Then one day, at a community event, she ran into representatives from Resonant Energy, a Boston-based solar developer that focuses on projects in low-income areas. Resonant’s staff understood both Jones’ passion for solar and her financial challenges. They introduced her to the Massachusetts Solar Loan, a program that financed residential solar projects, and offered lower-income borrowers fixed, below-market rates and forgiveness of 30 percent of the loan principal.

The solar panels on Jones’ home went up in October 2017 and she hasn’t had to pay an electric bill since the following April. Though her bill was less than $100 – lower than the state average of $126 – the savings have made it easy to afford her monthly solar loan payment of $127.

“When I got my solar panels I just felt like I won the lottery,” she said. “I found it to be very empowering.”

In Massachusetts, the average household spends 3 percent of its income on energy costs, while households with income between 30 percent and 60 percent of the area median — roughly between $32,000 and $64,000 for a family of three — spend 7 percent. For families living below the poverty line, this energy burden jumps to 21 percent.

Solar power could decrease those costs. For renters or homeowners who can’t install solar, community-shared solar — larger developments that sell power to multiple users — can help lower the cost of energy by a few hundred dollars each year. For homeowners who install their own systems, the savings will generally pay off the price in around five or six years. After that, all future savings are pure financial benefit.

These savings could make a meaningful difference to households that routinely have to choose between paying bills and buying medication or fresh food. Nationwide, more than 20 percent of households reported foregoing food or other necessities to pay an energy bill in 2015, the latest year for which data is available from the Energy Information Administration.

So far, however, low-income solar has gotten too little traction for the effects to be realized at any scale, supporters say. These initiatives are undermined by their failure to understand the cultural, historical, and financial realities in the communities they seek to serve, a dynamic Massachusetts is grappling with right now.

The state’s solar targets and policies are widely considered some of the most ambitious in the country. The Solar Massachusetts Renewable Target program, or SMART, recently expanded to provide incentives for 3,200 megawatts of solar development, a number that could power more than 300,000 average households. This expansion will more than double the state’s installed solar capacity.

The program pays the owners of solar generation units — anyone from private homeowners with a few panels on their roofs to large-sale solar farms — a set rate per kilowatt-hour of energy produced. The base rate depends on size and location, and increases slightly when the project includes features the state wishes to encourage, such as reclaiming a polluted site or serving low-income customers. The original base rates ranged from 15.6 cents to 35.8 cents, though they have, by design, dropped as more projects have signed up for the incentive.

There is also often an ingrained distrust of salespeople peddling energy deals.

Though the program includes incentives to encourage developments in low-income neighborhoods, there has been little progress toward this goal since SMART launched in November 2018: Just 4.7 percent of the capacity approved by the program as of late November 2020 has been for low-income projects. According to Ben Underwood, co-founder of Resonant Energy, that’s partially because the incentive doesn’t offer enough money to attract developers, whose main goal is to make a profit: It’s much more lucrative to build solar generation units on open land. At the federal level, a renewable energy tax credit can lower the net cost of a solar installation, but doesn’t make it easier for lower-income consumers to afford the upfront price.

However, the barriers go beyond the purely financial. “A lot of states focus on the monetary barriers,” said Nathan Phelps, regulatory director for clean energy advocacy group Vote Solar. “That doesn’t actually address all of the underlying issues.”

One major stumbling block is the current requirement that low-income solar customers buying energy from community shared systems — the main way renters or homeowners with unsuitable roofs access renewable energy — sign a contract. With a contract on their financial report, it may be more difficult for them to secure a car loan or other needed credit, Phelps said. The decision to go solar therefore becomes another hard choice, rather than an obvious financial boost.

In these communities, there is also often an ingrained distrust of salespeople peddling energy deals. For many years, competitive power suppliers preyed on low-income and minority neighborhoods in the state, promising low electricity prices and hiding expensive loopholes in the fine print. Low-income households often lost hundreds of dollars a year, to the tune of $57 million from 2015 to 2018, reports by state attorney general Maura Healey found. Today, many members of these communities are understandably wary when outsiders show up offering contracts for energy savings.

Environmental justice and clean energy activists are lobbying to change the system, allowing a simplified, no-contract form of payment that will avoid these concerns. So far, the state’s Department of Energy and the Environment, which oversees SMART, has not committed to such a change. Some in the industry, however, say there are hopeful signs that the state will soon start allowing smaller projects to go ahead without contracts.

Looking ahead, environmental justice advocates want more people from low-income and environmental justice communities actively engaged in the conversation next time the rules come up for revision.

“We need to provide benefits to people who live in environmental justice communities, then engage them to help us write the next policy,” Underwood said. “There’s something inherently democratic about solar and it is very important for us in crafting policy to make the most of that potential every step of the way.”



Derrick Fudge Died In a Mass Shooting. His Family Can’t Get Help Because of a Decade-Old Drug Charge.

In the backyard of his recently renovated home north of downtown Dayton, Dion Green is sitting on a garden sofa, rubbing his hands as he describes an unimaginably traumatic past 15 months.

On August 4, 2019, he and his father Derrick Fudge were at a bar in Dayton’s Oregon District. They were taking a break after weeks of reconstruction work on Green’s house, which had been damaged by a severe tornado two months prior. When a gunman appeared out of an alleyway and started shooting, Green and his father got as close to the ground as they could.

“I kept telling him to get up, we got to go,” he recalled. But Mr. Fudge died in his son’s arms that night, one of nine people murdered by a gunman who managed to fire off more than 40 shots in less than 30 seconds.

Green says he lost more than his father; he lost a dear friend. On top of that came the financial cost of both burying his father, which ran into thousands of dollars.

All U.S. states and territories have a crime victim compensation program that reimburses victims of crime for related costs, funded by a mix of fines, forfeited bail, and other fees. The funds help with funeral costs, counseling, loss of work earnings, and other expenses. However, each state maintains its own eligibility criteria. In Ohio, Fudge was not deemed a “qualifying victim.”

In March 2011, eight-and-a-half years before his death, Fudge pled guilty to a drug trafficking offense and was sentenced to a three-month home monitoring period and three years of probation. Ohio’s victim compensation program denies aid for individuals who’ve been involved in certain felony offenses within ten years, essentially barring people who have paid for the victim compensation program from benefitting from it.

When Green’s application for his father was denied, he was livid.

“It’s like [the shooter] is winning both ways — he’s taken our family members and then you’ve got to worry about how to pay for burying them,” he says. “My dad shouldn’t be held accountable for his own death.”

Six other states — Arkansas, Florida, Louisiana, Mississippi, North Carolina, and Rhode Island — also have laws denying compensation to victims of crimes who are involved in prior or ongoing felony offenses, or are engaged in felonious activity at the time of their victimization. An average of 36 percent of claims in those states are denied as a result, leaving victims or their surviving family members to pay out of pocket. Green says in his case some costs were partly offset by donations and his own health insurance, but much of it he paid himself.

Green isn’t the only one facing this issue.

It’s like getting kicked while you’re down.

Alayna Young was shot in her left leg in the same attack that killed Green’s father in Dayton last year. She was in the hospital when she found out her health insurance had lapsed four days before. “I immediately heard the cash registers in my head,” she said, and left the hospital the same day. After missing almost six weeks of work due to her injury, she was also denied compensation from the state. Young had been taking prescription Adderall, and her claim was refused due to a blood test showing the presence of amphetamines in her system.

More than a year later, with fragments of the bullet still in her leg, Young still owes close to $80,000 in medical fees. “I might have to file bankruptcy; that’s not something I want to do but I don’t see any other way,” she said.

“When people are victimized, we should aim to provide them with the services they need to heal and be safe, period,” said John Maki, the author of a 2019 paper detailing Illinois’ experience with crime victim compensation issues. Across the country, there are a wide variety of barriers preventing victims from receiving the support they need, ranging from denials due to drug tests to issues with the aid application process. The result is a patchwork of aid that varies by state: In Montana, nine in ten victims receive aid in an average of 60 days, but in West Virginia, only three in ten applicants get support and decisions can take as long as 210 days.

Maki said recent times have seen a push for possible change. “A growing number of states have begun to reexamine their crime victim compensation program, looking for ways to remove barriers to services. That’s not only the right thing to do for victims, but it’s also smart and cost-effective public safety policy.” Ohio is among them, and in November the state senate approved a bill reducing the disqualification period for those with a prior conviction, increasing compensation to survivors who require counseling, and no longer punishing victims in possession of drugs at the time of the crime.

But for some survivors, the exhaustion and trauma of the last year is still exacting a major toll.

“A letter came and said I could appeal (the compensation denial),” said Green, “but who’s really thinking about that? I’m still in the process of grieving. I said, ‘to hell with it.’”

It’s a sentiment echoed by Young. “There was a lot of back and forth and I already wasn’t in a great state of mind to really deal with any of this,” she said. “It’s like getting kicked while you’re down.”