FDIC’s Section 19 hiring rule changes take effect Oct. 1

Changes in bank hiring rules adopted by the federal bank deposit insurer last week, removing certain criminal offenses from the list of those triggering a requirement for prior written consent of the agency, are set to take effect Oct. 1, according to a notice Wednesday in the Federal Register.

The Federal Deposit Insurance Corp. (FDIC) Board on July 30 adopted changes to its rules implementing Section 19 of the Federal Deposit Insurance (FDI) Act to conform to the Fair Hiring in Banking Act (FHBA), which took effect near the end of 2022. Section 19 regulations, it noted, generally prohibit any person convicted of certain crimes from participating in banking without the prior written consent of the FDIC.

In a release, the agency said the most significant changes approved to these regs July 30 included:

  • the exclusion of certain older offenses;
  • harmonization of its rules with the FHBA’s exclusion of certain convictions that have been expunged, sealed, or dismissed;
  • conforming changes to match the FHBA’s exclusion of “de minimus” offenses, including “designated lesser offenses,” from the scope of Section 19 (including relatively minor offenses that are specified either by the FHBA or by the FDIC through regulations); and
  • exclusion of certain criminal offenses involving dishonesty (certain misdemeanor criminal offenses and certain drug-related offenses).

Federal Register notice

FDIC release