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On January 27, the League and Midcoast FCU testified in support of LD 97, An Act to Facilitate the Improvement of Credit Scores of Residents of Department of Corrections Facilities. The bill was requested by the Maine Department of Corrections and sponsored by Representative Daniel Sayre. It is based on work that Midcoast FCU is providing to some residents of Bolduc Correctional Facility, enabling them to use credit builder loans to acquire credit prior to their release.
The loan is being offered to residents with guaranteed income who are preparing for re-entry into society. For many of these individuals, their stay in the facility may have damaged or eliminated their credit scores, making things like securing housing, transportation, and employment even more challenging upon release.
Currently, loan proceeds are sent to commissary accounts, where residents have any applicable restitution or fees taken out before being sent back to share accounts at Midcoast FCU. This process is clunky, time-consuming, and can result in a delayed first payment. Since the loan is a secured loan, it is being provided on money residents have already paid restitution and fees on. LD 97 would exempt credit builder loan proceeds from this extra step, simplifying the process and preventing restitution from being paid twice on the same funds.
While there was some initial press surrounding the bill, no one testified in opposition to the legislation. The League plans to continue working with the Committee on Criminal Justice and Public Safety to ensure all questions about the program are answered as it moves through the legislative process. The Department of Corrections stated in their testimony that they would like to expand this program and offer it at more facilities.
If you are interested in learning more or have comments on this bill, please reach out to Krista Simonis, League Director of Governmental Affairs, at ksimonis@mainecul.org.