Congress Amends Sec. 19 of Federal Deposit Insurance Act

Congress recently amended Section 19 of the Federal Deposit Insurance Act that prohibits FDIC-insured institutions from hiring a person convicted of certain offenses, such as money laundering and breach of trust. The amendment was contained in the Fair Hiring in Banking Act, which was signed into law in December 2022 and became effective immediately.

The amendment makes several notable changes to Section 19. For instance, it excludes certain offenses from the scope of Section 19 based on the amount of time that has passed since the offense occurred or since the individual was released from incarceration. The amendment also excludes certain “lesser offenses,” as well as certain offenses that have been expunged, sealed, or dismissed. Finally, the amendment prescribes standards for the FDIC’s review of applications submitted under Section 19.