A proposal to add a new section to the agency’s rules and regulations that incorporates current policy allowing individuals convicted of certain minor offense to work in the credit union industry without applying for approval of the the federal credit union regulator was issued Thursday for a 60-day public comment period.
The proposed rule, issued by unanimous vote of the National Credit Union Administration (NCUA) Board, would add new Section 752 to the agency’s rules and regulations. It would incorporate into the rules the agency’s “second chance” interpretive ruling and policy statement (IRPS 19-1) and reflect the requirements of Section 205(d) of the Federal Credit Union Act, along with 2022 amendments under the Fair Hiring in Banking Act.
The agency noted that Section 205(d) prohibits, except with prior written consent of the NCUA Board, any person who has been convicted of certain criminal offenses involving dishonesty or breach of trust, or who has entered into a pretrial diversion or similar program in connection with a prosecution for such offense, from participating in the conduct of the affairs of an insured credit union.
The FHBA, included in the fiscal 2023 defense authorization act, revised Section 205(d) to expand employment opportunities for those with a previous minor or older criminal offense, among other provisions, according to summary information in the draft proposed rule. Those amendments went into effect in December 2022 (and have been similarly incorporated into related rules at the Federal Deposit Insurance Corp., or FDIC).
The summary notes that generally, the amendments codify a number of elements already contained in the NCUA’s current policy regarding Section 205(d) but also extend greater relief than what is currently available to certain individuals with prior convictions seeking employment with an insured credit union, particularly individuals with older convictions, expunged convictions, or prior convictions for a misdemeanor, any drug-related possession offense, or certain designated “lesser offenses.” It said the FHBA also clarifies several definitions and the procedures for processing a consent application.
The agency said the proposed rule would address, among other things, the individuals and types of offenses covered by Section 205(d), as well as the NCUA’s procedures for reviewing a consent application.
Draft Federal Register notice: Fair Hiring in Banking
Release: Board Issues Proposals on Fair Hiring in Banking; Simplification of Share Insurance