FDIC Closing in on Implementing the Fair Hiring in Banking Act With Proposed Regulations for Section 19
The Federal Deposit Insurance Corporation (FDIC) is nearing the final stages of enacting revisions to regulations related to Section 19 of the Federal Deposit Insurance Act. These revisions are being made to align with the Fair Hiring in Banking Act (FHBA), which aims to ease the hiring restrictions placed on financial institutions when considering job candidates with criminal records.
Background Checks and Employment Law
Background checks have long been a standard practice in the financial industry, with banks and other financial institutions conducting thorough investigations into the background of potential employees to ensure the safety and security of their institutions and customers. However, these checks often resulted in qualified candidates being denied employment solely on the basis of their criminal records.
The Fair Hiring in Banking Act recognized the need for a fairer hiring process for individuals with criminal records, while still maintaining the integrity of the banking industry. Under the FHBA, the FDIC was given the task of revising its regulations under Section 19 to provide financial institutions with clearer guidelines for hiring job candidates with criminal records.
These revisions are aimed at striking a balance between protecting the interests of the banking industry and providing employment opportunities for individuals who have paid their debt to society and are seeking a fresh start.
FHBA and Section 19 Revisions
The FHBA, signed into law in October 2020, brought about several changes to Section 19 of the Federal Deposit Insurance Act. These changes include the removal of certain barriers to employment for individuals with criminal records, such as:
1. Reducing the look-back period: The FHBA reduced the look-back period for considering criminal records from 10 years to 5 years for misdemeanor convictions and 7 years for felony convictions. This change allows financial institutions to focus on more recent activities and provides individuals with older criminal records an opportunity to be considered for employment.
2. Providing flexibility for exceptions: The FHBA allows financial institutions to consider certain factors when assessing the suitability of job candidates with criminal records. These factors include the nature and severity of the offense, the length of time since the offense occurred, evidence of rehabilitation, and other relevant factors. This flexibility enables financial institutions to make more informed decisions when hiring individuals with criminal records.
3. Encouraging the use of individualized assessments: The FHBA promotes the use of individualized assessments when evaluating job candidates with criminal records. Individualized assessments take into account the specific circumstances of each candidate, allowing financial institutions to consider mitigating factors and make fair and informed hiring decisions.
The revisions being made by the FDIC to regulations under Section 19 are intended to incorporate these changes and ensure consistency with the provisions outlined in the FHBA. The proposed regulations aim to provide financial institutions with clearer guidelines and procedures for hiring individuals with criminal records while safeguarding the industry’s integrity.
Frequently Asked Questions
Q: What is Section 19 of the Federal Deposit Insurance Act?
A: Section 19 of the Federal Deposit Insurance Act imposes certain restrictions on individuals with criminal records from holding positions in financial institutions. The Fair Hiring in Banking Act amended Section 19 to provide financial institutions with more flexibility in hiring individuals with criminal records.
Q: Why is it important to ease the restrictions on hiring individuals with criminal records?
A: Easing the restrictions allows individuals who have made mistakes in the past to have a fair chance at gaining employment, promoting their financial stability, and reducing the likelihood of re-offending. It also encourages rehabilitation and reintegration into society.
Q: How will the proposed regulations benefit financial institutions?
A: The proposed regulations will provide financial institutions with clearer guidelines and procedures for hiring individuals with criminal records. This clarity will enable financial institutions to make more informed decisions and assess the suitability of job candidates based on individualized assessments, mitigating factors, and evidence of rehabilitation.
In conclusion, the FDIC is closing in on implementing the Fair Hiring in Banking Act by finalizing the revisions to regulations under Section 19 of the Federal Deposit Insurance Act. These proposed regulations aim to strike a balance between providing employment opportunities for individuals with criminal records and maintaining the integrity of the banking industry. Financial institutions will benefit from clearer guidelines and procedures for hiring individuals with criminal records, promoting fairness and inclusivity in the hiring process.
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