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Background screening guidelines modified by Federal Deposit Insurance Act

Changes apply to employers within the Financial Services industry

Few sectors are as strictly regulated as Financial Services, and that close oversight extends to the industry’s background check policies. Recently the recommended guidelines for background screening, set forth in Section 19 of the Federal Deposit Insurance Act (FDI Act), were modified to expand the de minimis exceptions and provide increased direction around making conditional offers.

On August 20th, the Federal Deposit Insurance Corporation (FDIC) issued the modifications to Section 19 of the FDI Act, which prohibits a person convicted of any criminal offense involving dishonesty, breach of trust, money laundering, or who has entered a pretrial diversion program from working at a FDIC-insured institution. Modifications include:

  • The de minimis exceptions being modified to encompass convictions or program entries for issuance of insufficient funds checks of moderate aggregate value; small dollar, simple theft; and isolated minor offenses committed by young adults;
  • Allowing institutions to provide prospective employees conditional offers of employment pending a background check provided that the individual does not begin employment until the institution verifies that the individual’s participation is not barred by Section 19; and
  • Clarifying the definitions of “complete expungement,” “jail time,” and “pretrial diversion or similar programs.”

If you have any questions about the recent FDI Act modifications or employment screening strategies within the Financial Services industry, please contact your First Advantage account manager. Our team of experts understands industry-specific screening requirements, along with the complexities of building and maintaining compliant screening programs, and we can help.

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