Financial Exclusion and Criminalization of Poverty in Colombia: An Analysis Based on Ruling T-113 of 2025 of the Colombian Constitutional Court

Facts

Augusto Flórez Lozano, a Colombian citizen, repeatedly attempted to open savings account at various banks in the country. All his applications were rejected because, according to internal to SARLAFT (part of Colombia’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework) policies, he did not meet the requirements because he was convicted of a criminal offense in 2017. After serving his sentence, Flórez had managed to reintegrate into social and working life, working as a food vendor for events and as an accounting and tax advisor. However, as he was unable to access the financial system, he was forced to receive his payments through third parties, which affected his economic autonomy. Faced with this situation, he filed a tutela, a Colombian legal action for protecting fundamental rights, to be allowed to open a bank account in his name.

Summary of the ruling

In Ruling T-113 of 2025, the Constitutional Court analyzed the case brought by Mr. Flórez and analyzed the conflict between financial compliance policies (AML/CFT) and the fundamental rights of individuals with criminal records.

In its analysis, the Court reiterated the fundamental nature of the right to reintegration of convicted people and emphasized that access to the financial system is an essential requirement for effective social and economic reintegration. It also affirmed that AML/CFT systems cannot be applied automatically and exclusively, without conducting an individual risk analysis.

On this basis, it concluded that the banks had violated the plaintiff's fundamental rights by not allowing him access to the financial system without considering alternative risk mitigation measures. Therefore, it ordered the banks to open an account for Mr. Flórez, if he was still interested, and to adjust their internal procedures to avoid automatic restrictions. It also ordered the Financial Superintendency to issue a circular with clear guidelines to guarantee access to the financial system for people with criminal records.

Commentary

Constitutional Court’s Ruling T-113 of 2025 is particularly relevant because it takes a constitutional view of the right to reintegration in a context in which financial exclusion itself hinders social reintegration. Through this ruling, the Court recognizes that financial compliance policies cannot be an absolute obstacle that perpetuates exclusion, inequality, and the criminalization of poverty.

The right to reintegration and the duty of the State

According to Article 1 of its Constitution, Colombia is a social and democratic state under the rule of law. In this context, the primary purpose of imprisonment is not punishment, but reintegration. This is enshrined in Article 4 of the Colombian Criminal Code and has been pointed out by the Constitutional Court since its earliest rulings. In the words of the Court, prisons “hinder the reintegration of the individual into society and condemn him to stigmatization and isolation”.

In the specific case of Mr. Flórez, the inability to open a bank account directly violates that purpose. Currently, access to the financial system is not a convenience for its users, but rather a means of accessing various essential services. An inclusive financial system facilitates access for low-income individuals, traditionally excluded due to a lack of collateral or credit history, to products that allow them to save money safely, obtain credit to start a business or invest, and reduce their dependence on informal mechanisms, which are often more costly and dangerous. By recognizing this, the Court not only protects individual rights, but also strengthens an inclusive vision of justice and society.

Criminal records as negative personal data

Another central focus of constitutional analysis is the treatment of criminal records as sensitive negative personal data. Although these derive from public judgments, their disclosure and use are restricted by the right to habeas data, which recognizes the holders the faculty to know, update, rectify and restrict the circulation of their information. The Court has emphasized that not all persons or entities have a legitimate interest in accessing this data, and that its uncontrolled use can become an illegitimate barrier to exercising fundamental rights such as work, education, or, as in this case, access to the financial system. The automated processing of criminal records as grounds to deny someone a bank account contradicts the constitutional principles governing the protection of personal data: purpose, proportionality, and accuracy, among others. Such processing reinforces stigma, perpetuates exclusion, and disregards the value of human dignity.

Financial inclusion as a tool for development

In Colombia, financial inclusion has been promoted as a key strategy for tackling poverty and generating economic opportunities. Access to safe and affordable financial products allows individuals and businesses to manage income, save, invest, and reduce risks. In a country with high levels of informality and inequality, access to these services is crucial for moving toward a more equitable society.

In this regard, the Court's decision reminds us that excluding a person from the financial system is, in practice, equivalent to excluding them from exercising their economic citizenship. In 2023, 94.6% of Colombian adults had at least one financial product. Being outside this system is not only a practical difficulty: it is a form of structural marginalization that impacts the exercise of multiple rights.

Criminalization of poverty: a structural practice

Mr. Flórez's case cannot be understood in isolation. The Colombian criminal justice system has historically been selective in its treatment of the most vulnerable sectors of society. Most people deprived of their liberty in Colombia have not had access to higher education (only 4% according to data from the National Penitentiary and Prison Institute), and a significant proportion have not even completed secondary school. This distribution reveals a possible correlation between low educational attainment and imprisonment, which suggests that individuals with lower educational capital (and therefore with limited access to formal employment opportunities) are more likely to come into contact with the criminal justice system.

In addition, policies such as the war on drugs have disproportionately impacted poor women, many of them from rural or ethnic communities, who occupy low-level roles in drug trafficking chains and receive disproportionate sentences without any real possibility of judicial negotiation. The result is a form of justice that reproduces and deepens inequality rather than correcting it. Thus, financial exclusion is not a neutral measure. It often operates as an extension of the punitive logic that criminalizes people with fewer opportunities in a deeply unequal society. As a result, denying access to the financial system becomes a new mechanism of control and exclusion.

SARLAFT and the necessary balance

The SARLAFT system in Colombia has been an important tool for preventing money laundering and terrorist financing. It is composed of stages and components that must be implemented by financial entities, with the aim of preventing them from being used to give an appearance of legality to illicit funds or to channel resources into terrorist activities. However, its application should not become a fixed barrier. The Court recalled that financial institutions already have sufficient tools to manage risk without entirely excluding individuals.

In fact, there are regulatory precedents, such as External Circular 005 of 2018 mentioned in the ruling, which allow former FARC-EP combatants access to the financial system under reasonable and proportionate surveillance parameters. Case law indicates that the same can and should apply to any person who, having served their sentence, seeks to reintegrate socially and economically. It is not a matter of ignoring the risks, but of managing them in a proportionate, reasonable, and humane manner.

Conclusion

Ruling T-113 of 2025 marks a milestone in the defense of fundamental rights in Colombia. By recognizing that automatic exclusion from the financial system based on criminal records violates fundamental rights, the Court reiterates that reintegration is a constitutional goal. In a country where poverty and exclusion have been systematically criminalized, this decision represents a firm step toward a more humane justice system. Reintegration cannot remain confined to the rulings of the Constitutional Court and the provisions of the Criminal Code. It must be reflected in public and private decisions that consider the human dignity of those who seek to reintegrate into society.

Bibliography

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