A final rule narrowing the conditions for required written consent from the banking regulator to hire individuals with minor criminal offenses on their records will take effect Sept. 21, according to the agency’s notice in the Federal Register.
Approved by unanimous vote July 24 by the Federal Deposit Insurance Corp. (FDIC) Board, the final rule revises and codifies the agency’s statement of policy on Section 19 of the Federal Deposit Insurance Act (FDIA). That section prohibits, without the agency’s consent, any person from working in banking who has been convicted of a crime of dishonesty or breach of trust or money laundering, or who has entered a pretrial diversion or similar program in connection with the prosecution of such an offense.
The agency said that the final rule exempts all individuals whose covered offenses have been expunged from their records from submitting an application for consent from the FDIC to work in a financial institution again (the de minimis exception). The FDIC said an analysis of applications received from Jan. 1, 2017, through April 30, 2020, found that the change would have reduced the number of applications by approximately 10%.
Additionally, according to the FDIC, its new rule:
- Expands the scope of the de minimis exception for certain qualifying offenses involving the use or possession of false or fake identification, as well as for small-dollar, simple theft offenses;
- Eliminates the waiting periods for applicants who have had only one qualifying covered offense; and
- Allows a person with two, rather than one, de minimis crimes to qualify for the de minimis exception and decreases the waiting period for individuals with two such offenses to three years (or 18 months for those who were 21 years or younger at the time of their misconduct).