In a joint letter today, the American Bankers Association and the Consumer Bankers Association said that while they support proposed FDIC rulemaking to ease restrictions on bank hiring of job candidates with criminal histories, they had several recommendations for how the regulations could be improved.
Section 19 of the Federal Deposit Insurance Act generally prohibits banks from hiring a person convicted of an offense involving dishonesty, breach of trust or money laundering without first seeking consent from the FDIC. But in 2022, President Biden signed into law the Fair Hiring in Banking Act, which created several exclusions to the consent requirement. The FDIC’s proposed rulemaking would implement—and expand upon—the provisions of the Fair Hiring in Banking Act.
In their letter, ABA and CBA recommended the FDIC make several changes to the proposed regulations. They suggested excluding criminal offenses prosecuted by foreign authorities from the scope of Section 19; carefully tailoring the exclusion of “certain crimes involving controlled substances” from Section 19 coverage; providing much-needed certainty regarding offenses too small to justify a criminal convention (“de minimis” offenses); clarifying the definitions of “offense occurred” and “offense committed” to mean the date of the plea, conviction or program entry; and interpreting “sentencing occurred” to be the date of the plea, conviction or program entry.