March 11, 2020

Manchin, Bipartisan Colleagues Introduce Bill to Promote Fair Hiring In Banking

Washington, D.C. – U.S. Senator Joe Manchin (D-WV) today introduced bipartisan, bicameral legislation to reduce barriers to employment in the banking industry for qualified applicants with minor criminal records. Currently, otherwise highly qualified individuals with minor arrest or conviction records are prohibited from working in the banking industry because of a provision in the Federal Deposit Insurance Act, which requires financial institutions to screen out applicants with criminal records. While the law provides for waivers in some scenarios, the process is complex and arduous, and few applicants are successfully hired. This bill was also introduced by Senators Thom Tillis (R-NC), Doug Jones (D-AL), and John Cornyn (R-TX) and companion legislation will be introduced in the House of Representatives in the coming weeks by Representatives Joyce Beatty (D-Ohio) and Anthony Gonzales (R-Ohio).

“The opioid epidemic has ravaged West Virginia more than any other state. More and more people have acquired criminal records as a result of substance use disorder. Even for qualified individuals, criminal records make it much harder to get a job and reintegrate oneself back in as a productive community member. Today I am proud to join my colleagues on both sides of the aisle in introducing the Fair Hiring in Banking Act to change the banking industry’s regulations on hiring people with criminal records. If someone recovering from substance use disorder has done their time, we should, as a society, help them find employment and a place in society,” said Senator Manchin.

The Fair Hiring in Banking Act would replace the lifetime ban on working in the banking sector with a more sensible waiting period for individuals who have minor criminal records. It would allow applicants to be eligible for employment so long as they met all sentencing requirements for at least seven years. It would also create an exception for criminal conduct that was committed before age 21 and at least 30 months prior to employment, as well as ensure that expunged records, pardons, and sealed convictions are no longer a barrier to employment. 

The Fair Hiring in Banking Act will:

  • Replace the lifetime ban with a seven-year waiting period:  Under current law, an individual’s criminal conviction can block them from the industry for life. The Federal Deposit Insurance Corporation (FDIC), which regulates federally insured financial institutions, does not have the authority to create a time limit. Under this bill, the FDIC barrier will no longer apply to convictions for which all sentencing requirements have been met for at least seven years, in line with other regulatory authorities. 
  • Create an exception for acts committed before age 21: If the criminal conduct was committed before age 21—and at least 30 months prior to employment—and all sentencing requirements were met, the applicant will not be required to obtain a waiver from the FDIC.
  • Ensure that expunged records, pardons, and sealed convictions are no longer a barrier to employment:  Current FDIC rules don’t align well with state laws, so a hiring barrier can still exist even if a conviction was sealed, expunged, or pardoned.  This bill clarifies the law so that individuals with a criminal record that is expunged, sealed or pardoned will no longer need to seek an FDIC waiver before securing employment.