Job Opportunities in Finance for Those with Criminal Records

On December 29, 2022, President Biden signed legislation, which includes the passage of the Fair Hiring in Banking Act. The Act expands job opportunities in banking and financial institutions for those with a previous criminal offense. The new law is in line with a growing number of jurisdictions across the country that have prohibited private employers from asking questions about criminal convictions or arrest records on job applications, such as Fair Chance Acts and Ban-The-Box laws.

Prior to the Act, individuals with prior convictions were generally prohibited from working in banking without first gaining written consent from the Federal Deposit Insurance Corporation. These included crimes involving dishonesty, breach of trust, or money laundering.

The new law loosens the previous hiring restrictions so that they no longer apply to crimes under the following circumstances:

• Your conviction was expunged, sealed, or dismissed; or
• The offense was committed 7 or more years ago; or
• You were incarcerated and 5 or more years have passed since you were released from incarceration; or
• The offense was committed when you were 21 years old or younger, and more than 30 months have passed since the sentencing of the offense occurred.

Under the Act, the FDIC can expand the list of lower-risk crimes that may be exempt from hiring restrictions through future rulemaking under the following circumstances:

• Offenses that are punishable by 3 years or less in prison; or
• Offenses involving writing insufficient fund checks as long as the aggregate total value of all such checks is $2,000 or less, regardless of the number of convictions or pretrial diversion programs; or
• Other lower-risk crimes if at least 1 year has passed since the conviction and or pretrial program for the offense, such as a fake ID, shoplifting, trespassing, fare evasion, and driving with an expired license.

The Act’s new definition of “criminal offense involving dishonesty” does not include drug possession or misdemeanors committed more than 1 year before the date on which an individual files a consent application with the FDIC.

Still, financial institutions are required to conduct a criminal background check on job candidates, regardless of state or local laws that limit criminal history considerations in hiring. But the Act allows the FDIC to make individualized assessments for applications for an exemption that take into account factors, such as “evidence of rehabilitation, the applicant’s age at the time of the conviction or program entry, the time that has elapsed since conviction or program entry, and the relationship of individual’s offense to the responsibilities of the applicable position.” The FDIC must also consider the individual’s employment history, letters of recommendation, and the completion of any substance abuse or job preparation programs.

Overall, the Fair Hiring in Banking Act will lower barriers and expands opportunities in financial institutions for many people, as well as allow employers flexibility in hiring and recruitment. If you have any questions regarding the Fair Hiring in Baking Act or other related state and local laws, please contact a Levy Ratner attorney.