The Federal Deposit Insurance Corporation (FDIC) has approved revisions to regulations under Section 19 of the Federal Deposit Insurance (FDI) Act to conform to the Fair Hiring in Banking Act (FHBA) of 2022.
FDIC Chairman Martin J. Gruenberg expressed his support for the changes, stating that they will expand employment opportunities in the banking industry, particularly for people of color who are disproportionately affected by the criminal justice system.
Section 19 regulations generally prohibit any person convicted of certain crimes from participating in banking without the prior written consent of the FDIC. The revisions approved today seek to align Section 19 regulations with the FHBA’s provisions.
The most significant changes to the Section 19 regulations include excluding certain older 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 FDIC has also harmonized the FHBA’s standard with its existing regulations regarding expunged, sealed, and dismissed criminal records.
Additionally, the final rule provides conforming changes to match the FHBA’s exclusion of “de minimis” offenses, including relatively minor offenses that are specified either by the FHBA or by the FDIC through regulations. The rule also shifts the FDIC’s position on criminal offenses involving dishonesty, excluding certain offenses from the definition of “involving dishonesty.”
The FDIC has taken a major step towards reforming its regulations, paving the way for people with past convictions to find employment in the banking industry. However, critics argue that the changes may not go far enough in addressing the systemic issues that lead to mass incarceration and subsequent barriers to employment.
As the banking industry continues to evolve, the FDIC’s revisions to Section 19 regulations will have a significant impact on the lives of thousands of individuals with past convictions. While the changes are a step in the right direction, it remains to be seen whether they will be enough to address the systemic inequalities that plague the criminal justice system.
The FDIC’s decision to revise Section 19 regulations is a significant development in the ongoing conversation about reforming the banking industry’s approach to hiring individuals with past convictions. As the industry continues to navigate this complex issue, one thing is clear: the FDIC’s actions will have far-reaching consequences for thousands of individuals and families affected by the criminal justice system.
The final rule is effective immediately, and the FDIC will continue to monitor its implementation and make any necessary adjustments to ensure that the changes are effective in promoting fairness and equality in the banking industry.
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Key Facts
- Agency: FDIC
- Category: White Collar Crime|Financial Crimes
- Source: Official Source â†â€â€ÂÂ
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