Beginning in January of 2011 banks and other FDIC backed entities have implemented a policy requiring all employees to pass an in-depth background check pursuant to the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act). Not only are these companies having potential future employees consent to this extensive search, but also current employees. Many current bank employees who obtained their current jobs through company purchases, mergers, acquisitions, and other similar manners are at risk of termination if they don’t successfully pass this background search.
The Federal Deposit Insurance Corporation (FDIC) has a set of rules and regulations that govern and regulate the banking industry at a federal level known collectively as the Federal Deposit Insurance Act (FDIA). Section 19 of the FDIA holds banks accountable and liable to large fines and penalties for employing any individual with a breach of trust conviction, a money laundering conviction, or any other offense dealing with dishonesty. Most individuals who have had any of these convictions, and even those who have had them successfully expunged at the state level, wrongfully believe that because they are already employed by the bank they will not be barred by the Act. Unfortunately, they are mistaken and with this new background search they will not only be barred by Section 19, but also may be terminated.
Luckily, there is a petition process to get around Section 19 of the FDIA and keep your bank job. The FDIC headquarters eventually evaluates the petition, and it is there they decide whether or not to allow you to bypass the FDIA and continue to work in the banking industry. They evaluate many factors when making their decision, but we have seen them give great deference to those who have had their convictions expunged by the criminal courts at the State level.
If you currently are working in the banking industry, or plan on working in the banking industry in the future, and have prior convictions that may keep you from a job because of Section 19 of the FDIA, it is strongly encouraged to have your conviction expunged at the state level before you petition to the FDIC to bypass Section 19. While expungement is not a requirement before you petitioning, it does greatly increases your chances of having the FDIC grant your petition. Both the expungement process at the state level, and the FDIC petition process, do not happen over night and can take several months to process. The sooner you begin, the sooner you can go back to work!