Bankers Alliance Compliance Corner
Editor's Note: The following was submitted by Bankers Alliance. LBA, through its subsidiary Louisiana Bankers Service Corporation, has partnered with Bankers Alliance to give banks access to three compliance-related programs. Click here for more information.
Q: I read that the FDIC recently proposed rules that would remove restrictions on hiring candidates with criminal histories. What should we be considering regarding these new proposed changes?
A: As you mention, the FDIC did recently propose amendments to its regulations concerning section 19 of the Federal Deposit Insurance Act in light of another law that was enacted at the end of 2022—the Fair Hiring in Banking Act. In part, the FHBA lifted some of the restrictions on banks hiring candidates with criminal histories. Specifically, it excluded or exempted certain categories of criminal offenses, including certain older offenses, offenses by individuals aged 21 or younger and “certain lesser offenses.” However, these proposed revisions are at least in part just the “FDIC’s interpretation of section 19 in light of the FHBA.” In other words, while the FDIC is able to propose revisions to its own regulations, only the U.S. Congress is able to amend the actual law outlined in Section 19 of the FDIA. Further, it’s imperative that the bank also review its insurance policies and with its insurance provider as necessary. While changes to the regulations may grant the bank more flexibility in its hiring, these same practices may still be excluded from coverage by insurance companies as a matter on agreement. In other words, an insurance company could likely deny a claim or even refuse to issue a bond, even if the law or regulations would otherwise allow it.
Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933 or email info@compliancealliance.com and ask for the membership team.
Do you know the most common cybersecurity-related threats for banks?
- Weak security (social engineering, stolen credentials, leaks, etc.)
- Malware
- Weak change or project management (vendor risk)
- Corporate account takeovers
- Vulnerable web-based or mobile applications
Review Alliance is an independent group of compliance specialists offering banks deep-dive audits of their existing transactions, recommendations about program enhancements or guidance on future safety and soundness. Virtual Compliance Officer was added in 2020—a new shared service-model using bank-dedicated compliance officers; perfect for monitoring and guiding your bank remotely. To learn how to put them to work for your bank, call (833)-683-0701or email info@bankersalliance.org and ask for the membership team.