More than two dozen organizations dedicated to improving employment opportunities for people with a criminal record have written to the FDIC urging that it give regulated financial institutions greater latitude to hire qualified people without having to ask the FDIC’s permission. The occasion is the FDIC’s proposal to reduce to a formal rule its longstanding policy on employment of convicted individuals by banks, a proposal that suggests the FDIC may be open to giving banks more hiring autonomy by relaxing several controversial provisions. For 20 years, the FDIC has kept a tight grip on banks, requiring them to obtain a waiver before they may hire anyone with a record even in an entry-level non-professional position. In operation, this policy has been an effective bar to bank employment for most people with a conviction record (and even for some who have never been convicted).
The letter, organized by the National Employment Law Project and the Leadership Conference on Civil and Human Rights, points out that FDIC’s exclusionary policy is not required by its enabling statute, and urges the agency to bring its policy on hiring waivers into line with national efforts to further reintegration, in several different ways, some of which are discussed below. The letter cites the bipartisan federal Fair Chance Act and corresponding reforms in states across the country (as reported by CCRC), as well as many letters from bank industry leaders urging the FDIC to relax its rigid policy that has frustrated efforts to diversify the financial sector’s work force.
The comment below provides some background for the FDIC’s proposal, and comments on where some relaxation of its present policy is likely. It concludes with a note about the generally confusing and inconsistent treatment of state relief mechanisms like expungement and pardon in federal laws and regulations, suggesting that this is an area sorely in need of further study and proposals for reform.