FDIC Loosens Restrictions on Hiring Bank Personnel with Criminal Histories


All Employers in the Banking Industry


September 6, 2018


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The Federal Deposit Insurance Corporation (FDIC) recently released revised guidelines easing hiring requirements for banking industry employers. Historically, Section 19 of the Federal Deposit Insurance Act (the Act) prohibited employers in the banking industry, with FDIC-insured designation, from hiring individuals with certain criminal convictions – namely, convictions pertaining to crimes of dishonesty, breach of trust, money laundering, or individuals who accepted entry into a pretrial diversion program in connection with prosecution for similar types of offenses. According to the FDIC, the changes were made in an attempt to lower the number of individuals precluded from employment in the banking industry who have minor offenses and are currently considered to be of low risk.

FDIC consent is required to hire individuals with criminal backgrounds. However, consent is no longer required for offenses considered de minimis. FDIC consent will be automatically granted in cases meeting the following criteria:

  1. There is only one conviction or program entry of record for a covered offense;
  2. The offense was punishable by imprisonment for a term of one 1 year or less and/or a fine of $2,500 or less, and the individual served three 3 days or less of jail time;
  3. The conviction or program entry occurred at least 5 years prior to the date an application would otherwise be required; and
  4. The offense did not involve an insured depository institution or insured credit union.

The de minimis exception was also expanded to include convictions for writing checks with insufficient funds, small-dollar theft, fake identification to purchase alcohol when under the legal age, and certain minor offenses committed at the age of 21 or younger. The excepted violations must still meet the other qualifications of a de minimis offense.

Action Items

  1. Review the FDIC’s Statement of Policy here.
  2. Have hiring, selection, and background check processes reviewed and updated consistent with the new guidelines.
  3. Have applicable staff trained on appropriate hiring practices.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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