FDIC Closing in on Implementing the Fair Hiring in Banking Act With Proposed Regulations for Section 19
The Federal Deposit Insurance Corporation (FDIC) is making significant progress in reforming banking hiring practices with the imminent implementation of the Fair Hiring in Banking Act (FHBA). These new regulations will align Section 19 of the Federal Deposit Insurance Act with the provisions of the FHBA, which aims to ease restrictions on hiring individuals with criminal records.
Proposed Rules to Bring Section 19 Regulations in Line with FHBA
On November 14, 2023, the FDIC published a notice of proposed rulemaking to update the Section 19 regulations and align them with the FHBA. These proposed rules aim to expand the types of criminal offenses excluded from Section 19, including certain drug-related offenses. Additionally, the regulations will define key terms and provide clarity on the application process for waivers.
The FDIC’s proposed regulations seek to bring its current Section 19 regulations in line with the amendments made by the Fair Hiring in Banking Act. By doing so, financial institutions will have greater flexibility in hiring candidates with criminal records, provided that certain criteria are met.
Expanding Exclusions and Definitions
The proposed regulations would expand the scope of expunged, sealed, or dismissed offenses that are excluded from Section 19. This means that individuals with such offenses on their record may not need to apply for a waiver from the FDIC. The regulations would also provide key definitions for certain “older” offenses that the FHBA excludes from Section 19.
However, there are still some unanswered questions regarding the scope of offenses that fall under the definition of “de minimis offenses.” These offenses would be entitled to an automatic waiver without requiring an application from the FDIC.
Implications for Employers
While the FDIC’s proposed regulations are still being finalized, employers should take note of the upcoming changes intended to align the FDIC’s regulations with the Fair Hiring in Banking Act. These changes will provide financial institutions with more flexibility in hiring individuals with criminal records, allowing them to consider a wider range of candidates.
Frequently Asked Questions
What is the Fair Hiring in Banking Act?
The Fair Hiring in Banking Act (FHBA) is a legislation signed into law by President Biden in December 2022. It aims to ease restrictions on financial institutions hiring individuals with criminal records by narrowing the types of offenses covered under Section 19 of the Federal Deposit Insurance Act.
What are the proposed changes to Section 19?
The proposed changes to Section 19 include expanding the types of criminal offenses excluded from the section, providing definitions for certain “older” offenses, and expanding the scope of expunged, sealed, or dismissed offenses that are excluded from Section 19.
Will individuals with criminal records no longer require an FDIC waiver?
Under the new regulations, individuals with certain expunged, sealed, or dismissed offenses may not need to apply for an FDIC waiver. However, the specific criteria for exclusion will be determined by the finalized regulations.
How will these changes affect banking hiring practices?
The changes brought by the Fair Hiring in Banking Act and the proposed FDIC regulations will provide financial institutions with more flexibility in hiring individuals with criminal records. They will be able to consider a wider range of candidates, allowing for greater inclusivity and diversity in the industry.
Where can I find more information about these proposed regulations?
For more information about the proposed regulations and their implications for banking hiring practices, you can visit the FDIC’s official website or consult legal and compliance professionals in the banking industry.
Conclusion
The FDIC’s efforts to bring its regulations in line with the Fair Hiring in Banking Act demonstrate a commitment to reforming banking hiring practices. These proposed regulations, once implemented, will provide financial institutions with greater flexibility in considering individuals with criminal records for employment. By aligning Section 19 with the FHBA, the FDIC aims to promote inclusivity and diversity in the industry while ensuring appropriate safeguards are in place. For more information on banking hiring practices, visit [VisBanking.com](https://visbanking.com/).
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