The Federal Deposit Insurance Act requires individuals convicted of certain criminal offenses to obtain written permission from the Federal Deposit Insurance Corporation (FDIC) prior to employment with a depository institution. The FDIC announced on July 24, 2020, that it has amended its Statement of Policy (SOP) relating to the law. The amendments were designed to ease lenders’ restrictions and expand the pool of potential employees in the financial industry.
Below is a summary of the major changes to the SOP.
Convictions that have been expunged or sealed are now excluded from the SOP, meaning no written permission will be required from the FDIC prior to employment. Additionally, the exception for de minimis offenses (offenses for which a person will be deemed automatically approved without need for an application) has been expanded as follows:
- The small-dollar theft exception threshold was raised from $500 to $1000; and
- The exception for the use of a fake identification by a person under the age of 21 for alcohol-related purposes was expanded to cover use to circumvent any age-based restrictions on purchases, activities, or entry.
Previously, there was a limit of one de minimis offense to this exception, but it has now been raised to allow for two offenses. Finally, the required five-year waiting period after one de minimis offense has been eliminated.
Going forward, there will a three-year waiting period only for those with two offenses on record. The FDIC states that, after reviewing applications that were approved over the last several years, it believes these restrictions can be relaxed without significantly increasing the risk to the financial system.
This publication up to date as of July 28, 2020 and is provided only for educational purposes; it should not be relied upon as legal advice, and it should not be used, in whole or in part, as a basis for establishing employment practices or policies, nor should it be used for resolving disputes or managing risk. Every reader’s circumstances are unique and legal advice should be obtained only from a lawyer with whom the reader has established an attorney-client relationship. Copyright 2020 ©Employment Screening Services, Inc. All material contained within this publication is protected by copyright law and may not be reproduced without the express written consent of ESS.
