The FDIC today finalized an ABA-supported rule codifying 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.
The final rule narrows the scope of crimes subject to Section 19, reducing barriers for individuals with prior criminal records who are seeking employment at a financial institution, while protecting the integrity of the banking system. Specifically, the rule exempts all individuals whose covered offenses have been expunged from submitting an application to the FDIC and makes changes to the current de minimis exception for certain offenses.
“Since the beginning of 2017, the FDIC has approved every Section 19 application that would qualify for relief under the final rule without controversy,” said FDIC Chairman Jelena McWilliams. “While not major in scope, the changes in the final rule will have a major impact on individuals who no longer need to obtain written consent from the FDIC in order to work for a bank.”