RECLAIM Act Proposes Clawback of Federal Funds from Institutions Violating Civil Rights

The RECLAIM Act introduces significant changes to how the federal government handles civil rights compliance for institutions receiving federal money. It amends the Civil Rights Act of 1964 to give agencies the power to demand repayment of federal financial assistance if an institution is found non-compliant. The bill also broadens the impact of non-compliance findings and mandates funding freezes under certain legal circumstances.

One Strike, Program Out?

Under this bill (Section 2), if one part of a program or activity funded by federal dollars is found to violate civil rights law, the entire program or activity could be deemed non-compliant. Think about a large university: an issue within a single department could potentially jeopardize federal funding connected to the whole institution, not just the specific area where the problem occurred. This significantly raises the stakes for institutions managing federal grants and programs.

Payback Time: The Recoupment Clause

Section 3 introduces a powerful enforcement tool: recoupment. If an institution receiving federal funds is found non-compliant with civil rights laws during a fiscal year, the government can require repayment of all federal assistance received for that program or activity during that year. This isn't just about stopping future funds; it's about clawing back money already spent. Imagine a community college using federal grants for job training – a non-compliance finding could mean a sudden, massive bill from the government, potentially impacting budgets and the ability to offer programs.

Funding Freeze on Allegations

Section 4 adds another layer: if a court issues an injunction against an institution alleging a civil rights violation, federal agencies must halt funding. This freeze lasts until the court confirms compliance or for one year, whichever comes first. The agency issuing the injunction must also alert other federal agencies, triggering a government-wide funding stop. This means federal support for research, student aid, or community services could be abruptly cut off based on a preliminary court order, potentially disrupting operations and affecting students or beneficiaries before a final judgment on the violation itself is reached. This could hit institutions with fewer resources particularly hard, making it tougher to weather the freeze or address the underlying allegations.