ABA Supports FDIC’s Section 19 Proposal

In a comment letter to the FDIC today, the American Bankers Association offered support for a recent proposal to codify as regulation the agency’s statement of policy regarding the implementation of Section 19 of the Federal Deposit Insurance Act. Section 19 prohibits persons convicted of a criminal offense involving dishonesty, breach of trust or money laundering from being employed by financial institutions without prior written consent of the agency.

Recognizing the financial industry’s need to balance talent acquisition and retention with protecting the security and integrity of bank operations, ABA noted that the proposal strikes “an effective and reasonable balance between these objectives.” ABA encouraged the FDIC to include in its final rule language to support insured institutions faced with state and local laws that restrict background checks and other reasonable actions needed for the bank to comply with Section 19 requirements and clarify the applicability of Section 19 to contractors.