[House Report 117-314]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 117-314
======================================================================
FAIR HIRING IN BANKING ACT
_______
May 10, 2022.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Ms. Waters, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 5911]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5911) to amend the Federal Deposit Insurance Act
and the Federal Credit Union Act to expand employment
opportunities for those with a previous minor criminal offense,
and for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 6
Background and Need for Legislation.............................. 6
Section-by-Section Analysis of the Legislation................... 7
Hearings......................................................... 9
Committee Consideration.......................................... 9
Committee Votes.................................................. 9
Committee Oversight Findings..................................... 11
Statement of Performance Goals and Objectives.................... 11
New Budget Authority and C.B.O. Cost Estimate.................... 11
Committee Cost Estimate.......................................... 12
Federal Mandates Statement....................................... 12
Advisory Committee Statement..................................... 12
Applicability to Legislative Branch.............................. 12
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits....................................................... 13
Duplicative Federal Programs..................................... 13
Changes in Existing Law.......................................... 13
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Hiring in Banking Act''.
SEC. 2. FEDERAL DEPOSIT INSURANCE ACT.
Section 19 of the Federal Deposit Insurance Act (12 U.S.C. 1829) is
amended--
(1) by inserting after subsection (b) the following:
``(c) Exceptions.--
``(1) Certain older offenses.--
``(A) In general.--With respect to an individual,
subsection (a) shall not apply to an offense if--
``(i) it has been 7 years or more since the
offense occurred; or
``(ii) the individual was incarcerated with
respect to the offense and it has been 5 years
or more since the individual was released from
incarceration.
``(B) Offenses committed by individuals 21 or
younger.--For individuals who committed an offense when
they were 21 years of age or younger, subsection (a)
shall not apply to the offense if it has been more than
30 months since the sentencing occurred.
``(C) Limitation.--This paragraph shall not apply to
an offense described under subsection (a)(2).
``(2) Expungement and sealing.--With respect to an
individual, subsection (a) shall not apply to an offense if--
``(A) there is an order of expungement, sealing, or
dismissal that has been issued in regard to the
conviction in connection with such offense; and
``(B) it is intended by the language in the order
itself, or in the legislative provisions under which
the order was issued, that the conviction shall be
destroyed or sealed from the individual's State or
Federal record, even if exceptions allow the record to
be considered for certain character and fitness
evaluation purposes.
``(3) De minimis exemption.--
``(A) In general.--Subsection (a) shall not apply to
such de minimis offenses as the Corporation determines,
by rule.
``(B) Confinement criteria.--In issuing rules under
subparagraph (A), the Corporation shall include a
requirement that the offense was punishable by a term
of three years or less confined in a correctional
facility, where such confinement--
``(i) is calculated based on the time an
individual spent incarcerated as a punishment
or a sanction, not as pretrial detention; and
``(ii) does not include probation or parole
where an individual was restricted to a
particular jurisdiction or was required to
report occasionally to an individual or a
specific location.
``(C) Bad check criteria.--In setting the criteria
for de minimis offenses under subparagraph (A), if the
Corporation establishes criteria with respect to
insufficient funds checks, the Corporation shall
require that the aggregate total face value of all
insufficient funds checks across all convictions or
program entries related to insufficient funds checks is
$2,000 or less.
``(D) Designated lesser offenses.--Subsection (a)
shall not apply to certain lesser offenses (including
the use of a fake ID, shoplifting, trespass, fare
evasion, driving with an expired license or tag, and
such other low-risk offenses as the Corporation may
designate) if 1 year or more has passed since the
applicable conviction or program entry.''; and
(2) by adding at the end the following:
``(f) Consent Applications.--
``(1) In general.--The Corporation shall accept consent
applications from an individual and from an insured depository
institution or depository institution holding company on behalf
of an individual that are filed separately or contemporaneously
with a regional office of the Corporation.
``(2) Sponsored applications filed with regional offices.--
Consent applications filed at a regional office of the
Corporation by an insured depository institution or depository
institution holding company on behalf of an individual--
``(A) shall be reviewed by such office;
``(B) may be approved or denied by such office, if
such authority has been delegated to such office by the
Corporation; and
``(C) may only be denied by such office if the
general counsel of the Corporation (or a designee)
certifies that the denial is consistent with this
section.
``(3) Individual applications filed with regional offices.--
Consent applications filed at a regional office by an
individual--
``(A) shall be reviewed by such office; and
``(B) may be approved or denied by such office, if
such authority has been delegated to such office by the
Corporation, except with respect to--
``(i) cases involving an offense described
under subsection (a)(2); and
``(ii) such other high-level security cases
as may be designated by the Corporation.
``(4) National office review.--The national office of the
Corporation shall--
``(A) review any consent application with respect to
which a regional office is not authorized to approve or
deny the application; and
``(B) review any consent application that is denied
by a regional office, if the individual requests a
review by the national office.
``(5) Forms and instructions.--
``(A) Availability.--The Corporation shall make all
forms and instructions related to consent applications
available to the public, including on the website of
the Corporation.
``(B) Contents.--The forms and instructions described
under subparagraph (A) shall provide a sample cover
letter and a comprehensive list of items that may
accompany the application, including clear guidance on
evidence that may support a finding of rehabilitation.
``(6) Consideration of criminal history.--
``(A) Regional office consideration.--In reviewing a
consent application, a regional office shall--
``(i) primarily rely on the criminal history
record of the Federal Bureau of Investigation;
and
``(ii) provide such record to the applicant
to review for accuracy.
``(B) Certified copies.--The Corporation may not
require an applicant to provide certified copies of
criminal history records unless the Corporation
determines that there is a clear and compelling
justification to require additional information to
verify the accuracy of the criminal history record of
the Federal Bureau of Investigation.
``(7) Consideration of rehabilitation.--Consistent with title
VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.),
the Corporation shall--
``(A) conduct an individualized assessment when
evaluating consent applications that takes into account
evidence of rehabilitation, the applicant's age at the
time of the conviction or program entry, the time that
has elapsed since conviction or program entry, and the
relationship of individual's offense to the
responsibilities of the applicable position;
``(B) consider the individual's employment history,
letters of recommendation, certificates documenting
participation in substance abuse programs, successful
participating in job preparation and educational
programs, and other relevant mitigating evidence; and
``(C) consider any additional information the
Corporation determines necessary for safety and
soundness.
``(8) Scope of employment.--With respect to an approved
consent application filed by an insured depository institution
or depository institution holding company on behalf of an
individual, if the Corporation determines it appropriate, such
approved consent application shall allow the individual to work
for the same employer (without restrictions on the location)
and across positions, except that the prior consent of the
Corporation (which may require a new application) shall be
required for any proposed significant changes in the
individual's security-related duties or responsibilities, such
as promotion to an officer or other positions that the employer
determines will require higher security screening credentials.
``(9) Coordination with the ncua.--In carrying out this
section, the Corporation shall consult and coordinate with the
National Credit Union Administration as needed to promote
consistent implementation where appropriate.
``(g) Definitions.--In this section:
``(1) Consent application.--The term `consent application'
means an application filed with Corporation by an individual
(or by an insured depository institution or depository
institution holding company on behalf of an individual) seeking
the written consent of the Corporation under subsection (a)(1).
``(2) Criminal offense involving dishonesty.--The term
`criminal offense involving dishonesty'--
``(A) means an offense under which an individual,
directly or indirectly--
``(i) cheats or defrauds; or
``(ii) wrongfully takes property belonging to
another in violation of a criminal statute;
``(B) includes an offense that Federal, State, or
local law defines as dishonest, or for which dishonesty
is an element of the offense; and
``(C) does not include--
``(i) a misdemeanor criminal offense
committed more than one year before the date on
which an individual files a consent
application, excluding any period of
incarceration; or
``(ii) an offense involving the possession of
controlled substances.
``(3) Pretrial diversion or similar program.--The term
`pretrial diversion or similar program' means a program
characterized by a suspension or eventual dismissal or reversal
of charges or criminal prosecution upon agreement by the
accused to restitution, drug or alcohol rehabilitation, anger
management, or community service.''.
SEC. 3. FEDERAL CREDIT UNION ACT.
Section 205(d) of the Federal Credit Union Act (12 U.S.C. 1785(d)) is
amended by adding at the end the following:
``(4) Exceptions.--
``(A) Certain older offenses.--
``(i) In general.--With respect to an
individual, paragraph (1) shall not apply to an
offense if--
``(I) it has been 7 years or more
since the offense occurred; or
``(II) the individual was
incarcerated with respect to the
offense and it has been 5 years or more
since the individual was released from
incarceration.
``(ii) Offenses committed by individuals 21
or younger.--For individuals who committed an
offense when they were 21 years of age or
younger, paragraph (1) shall not apply to the
offense if it has been more than 30 months
since the sentencing occurred.
``(iii) Limitation.--This subparagraph shall
not apply to an offense described under
paragraph (1)(B).
``(B) Expungement and sealing.--With respect to an
individual, paragraph (1) shall not apply to an offense
if--
``(i) there is an order of expungement,
sealing, or dismissal that has been issued in
regard to the conviction in connection with
such offense; and
``(ii) it is intended by the language in the
order itself, or in the legislative provisions
under which the order was issued, that the
conviction shall be destroyed or sealed from
the individual's State or Federal record, even
if exceptions allow the record to be considered
for certain character and fitness evaluation
purposes.
``(C) De minimis exemption.--
``(i) In general.--Paragraph (1) shall not
apply to such de minimis offenses as the Board
determines, by rule.
``(ii) Confinement criteria.--In issuing
rules under clause (i), the Board shall include
a requirement that the offense was punishable
by a term of three years or less confined in a
correctional facility, where such confinement--
``(I) is calculated based on the time
an individual spent incarcerated as a
punishment or a sanction, not as
pretrial detention; and
``(II) does not include probation or
parole where an individual was
restricted to a particular jurisdiction
or was required to report occasionally
to an individual or a specific
location.
``(iii) Bad check criteria.--In setting the
criteria for de minimis offenses under clause
(i), if the Board establishes criteria with
respect to insufficient funds checks, the Board
shall require that the aggregate total face
value of all insufficient funds checks across
all convictions or program entries related to
insufficient funds checks is $2,000 or less.
``(iv) Designated lesser offenses.--Paragraph
(1) shall not apply to certain lesser offenses
(including the use of a fake ID, shoplifting,
trespass, fare evasion, driving with an expired
license or tag, and such other low-risk
offenses as the Board may designate) if 1 year
or more has passed since the applicable
conviction or program entry.
``(5) Consent applications.--
``(A) In general.--The Board shall accept consent
applications from an individual and from an insured
credit union on behalf of an individual that are filed
separately or contemporaneously with a regional office
of the Board.
``(B) Sponsored applications filed with regional
offices.--Consent applications filed at a regional
office of the Board by an insured credit union on
behalf of an individual--
``(i) shall be reviewed by such office;
``(ii) may be approved or denied by such
office, if such authority has been delegated to
such office by the Board; and
``(iii) may only be denied by such office if
the general counsel of the Board (or a
designee) certifies that the denial is
consistent with this section.
``(C) Individual applications filed with regional
offices.--Consent applications filed at a regional
office by an individual--
``(i) shall be reviewed by such office; and
``(ii) may be approved or denied by such
office, if such authority has been delegated to
such office by the Board, except with respect
to--
``(I) cases involving an offense
described under paragraph (1)(B); and
``(II) such other high-level security
cases as may be designated by the
Board.
``(D) National office review.--The national office of
the Board shall--
``(i) review any consent application with
respect to which a regional office is not
authorized to approve or deny the application;
and
``(ii) review any consent application that is
denied by a regional office, if the individual
requests a review by the national office.
``(E) Forms and instructions.--
``(i) Availability.--The Board shall make all
forms and instructions related to consent
applications available to the public, including
on the website of the Board.
``(ii) Contents.--The forms and instructions
described under clause (i) shall provide a
sample cover letter and a comprehensive list of
items that may accompany the application,
including clear guidance on evidence that may
support a finding of rehabilitation.
``(F) Consideration of criminal history.--
``(i) Regional office consideration.--In
reviewing a consent application, a regional
office shall--
``(I) primarily rely on the criminal
history record of the Federal Bureau of
Investigation; and
``(II) provide such record to the
applicant to review for accuracy.
``(ii) Certified copies.--The Board may not
require an applicant to provide certified
copies of criminal history records unless the
Board determines that there is a clear and
compelling justification to require additional
information to verify the accuracy of the
criminal history record of the Federal Bureau
of Investigation.
``(G) Consideration of rehabilitation.--Consistent
with title VII of the Civil Rights Act of 1964 (42
U.S.C. 2000e et seq.), the Board shall--
``(i) conduct an individualized assessment
when evaluating consent applications that takes
into account evidence of rehabilitation, the
applicant's age at the time of the conviction
or program entry, the time that has elapsed
since conviction or program entry, and the
relationship of individual's offense to the
responsibilities of the applicable position;
``(ii) consider the individual's employment
history, letters of recommendation,
certificates documenting participation in
substance abuse programs, successful
participating in job preparation and
educational programs, and other relevant
mitigating evidence; and
``(iii) consider any additional information
the Board determines necessary for safety and
soundness.
``(H) Scope of employment.--With respect to an
approved consent application filed by an insured credit
union on behalf of an individual, if the Board
determines it appropriate, such approved consent
application shall allow the individual to work for the
same employer (without restrictions on the location)
and across positions, except that the prior consent of
the Board (which may require a new application) shall
be required for any proposed significant changes in the
individual's security-related duties or
responsibilities, such as promotion to an officer or
other positions that the employer determines will
require higher security screening credentials.
``(I) Coordination with fdic.--In carrying out this
subsection, the Board shall consult and coordinate with
the Federal Deposit Insurance Corporation as needed to
promote consistent implementation where appropriate.
``(6) Definitions.--In this subsection:
``(A) Consent application.--The term `consent
application' means an application filed with Board by
an individual (or by an insured credit union on behalf
of an individual) seeking the written consent of the
Board under paragraph (1)(A).
``(B) Criminal offense involving dishonesty.--The
term `criminal offense involving dishonesty'--
``(i) means an offense under which an
individual, directly or indirectly--
``(I) cheats or defrauds; or
``(II) wrongfully takes property
belonging to another in violation of a
criminal statute;
``(ii) includes an offense that Federal,
State, or local law defines as dishonest, or
for which dishonesty is an element of the
offense; and
``(iii) does not include--
``(I) a misdemeanor criminal offense
committed more than one year before the
date on which an individual files a
consent application, excluding any
period of incarceration; or
``(II) an offense involving the
possession of controlled substances.
``(C) Pretrial diversion or similar program.--The
term `pretrial diversion or similar program' means a
program characterized by a suspension or eventual
dismissal or reversal of charges or criminal
prosecution upon agreement by the accused to
restitution, drug or alcohol rehabilitation, anger
management, or community service.''.
SEC. 4. REVIEW AND REPORT TO CONGRESS.
Not later than the end of the 2-year period beginning on the date of
enactment of this Act, the Federal Deposit Insurance Corporation and
the National Credit Union Administration shall--
(1) review the rules issued to carry out this Act and the
amendments made by this Act on--
(A) the application of section 19 of the Federal
Deposit Insurance Act (12 U.S.C. 1829) and section
205(d) of the Federal Credit Union Act (12 U.S.C.
1785(d));
(B) the number of applications for consent
applications under such sections; and
(C) the rates of approval and denial for consent
applications under such sections;
(2) make the results of the review required under paragraph
(1) available to the public; and
(3) issue a report to Congress containing any legislative or
regulatory recommendations for expanding employment
opportunities for those with a previous minor criminal offense.
Purpose and Summary
On November 9, 2021, Representative Beatty introduced H.R.
5911, the ``Fair Hiring in Banking Act'', which would expand
employment opportunities at banks and credit unions by reducing
barriers based on past criminal offenses. Currently, the FDIC
and NCUA require banks and credit unions to obtain waivers in
order to hire persons convicted of certain criminal offenses,
including offenses involving dishonesty. This bill would
provide an exception from needing such a waiver for certain
criminal charges in which the offense occurred over 7 years ago
or where incarceration ended over 5 years ago. It would also
provide a clear definition of ``criminal offense involving
dishonesty.'' Lastly, it would clarify that criminal offenses
that have been expunged, sealed, or dismissed are not included
in the FDIC or NCUA review of eligibility to work.
Background and Need for Legislation
This bill codifies and builds on recent reforms the Federal
Deposit Insurance Corporation (FDIC) and National Credit Union
Administration (NCUA) implemented to promote economic
opportunities for justice-involved individuals. In July 2020,
the FDIC approved a final rule to revise and incorporate into
the agency's regulations a longstanding Statement of Policy
(SOP) related to Section 1 which expanded the de minimis
exceptions, clarified how to handle expungements, defined some
convictions, and clarified that banks should ask about an
applicant's prior record only after they have received a
conditional offer of employment. In 2019, the National Credit
Union Administration (NCUA) Board approved a final interpretive
ruling and policy statement allowing people convicted of
certain minor offenses to return to work in the credit union
industry without applying for the Board's approval. However,
the actions of the FDIC and board of the NCUA did not address
the treatment of drug-related offenses, consideration of a
person's role (there is currently no distinction made between a
bank president and a custodial position), the length of time
since the offense occurred, and the process of gaining consent
from the FDIC and NCUA when a waiver is sought.
The limits on ``lookback'' periods and clear definitions in
this bill are commonsense reforms to reduce unnecessary
barriers to employment in America's banks and credit unions and
to prevent discrimination against justice-involved individuals
from persisting long after potential employees have served
their time. One in three Americans is justice-involved and
these individuals often struggle to obtain employment because
of their criminal record. Moreover, longstanding racial
discrimination in the justice system has been well documented
with people of color being incarcerated at five times the rate
as White offenders. This bill would help justice-involved
individuals reintegrate into society by eliminating unjustified
barriers to employment opportunities in the financial industry.
It would also help address racial inequities in the criminal
justice and financial services industry.
This bill is supported by the following organizations: Bank
Policy Institute, Credit Union National Association (CUNA),
JPMorgan Chase, National Association of Federally Insured
Credit Unions (NAFCU), National Bankers Association (NBA),
American Financial Services Association (AFSA) and Public
Citizen.
Section-by-Section Analysis
Section 1. Short title
This section establishes the short title of the bill as
``Fair Hiring in Banking Act''.
Section 2. Federal Deposit Insurance Act
Amends Section 19(a) of the Federal Deposit
Insurance Act, which establishes the criminal
background lookback periods for depository institutions
insured by the Federal Depositor Insurance Corporation
(FDIC).
Reduces the look back period to 7 years
since the offense occurred or 5 years since the
individual was released from supervision. It reduces
the criminal look back period to 30 months for
individuals who were under the age of 21 years old when
the offense was committed. This section also prevents
the examining of offenses that have been pardoned,
sealed, or expunged.
Requires the board to accept consent
applications from insured credit unions on behalf of
individuals.
Requires that companies use FBI criminal
background checks in their reviews and allow applicants
to review for accuracy; and not require individuals to
provide copies of criminal records unless there is a
clear and compelling justification.
Provides the opportunity for contextual
evaluation, companies should factor in evidence of
rehabilitation, age during time of conviction or
probation, and relevance of offense to the position.
Companies should also assume that an individual is
rehabilitated if four years has passed since the
offense and there are no other convictions.
Requires companies to consider an
individual's employment history, letters of
recommendation, participation in substance abuse
programs, successful participation in job preparation
and educational programs, and other relevant
information.
Requires prior consent of the board is
required for changes in the individual's
securityrelated duties or responsibilities, such as
promotions or additional credentials.
Defines criminal offenses involving
dishonesty.
Section 3. Federal Credit Union Act
Amends Section 205(3) of the Federal Credit
Union Act, which establishes the lookback period for
credit unions insured by the National Credit Union
Administration (NCUA).
Reduces the look back period to 7 years
since the offense occurred or 5 years since the
individual was released from supervision. It reduces
the criminal look back period to 30 months for
individuals who were under the age of 21 years old when
the offense was committed. This section also prevents
the examining of offenses that have been pardoned,
sealed, or expunged.
Requires the board to accept consent
applications from insured credit unions on behalf of
individuals.
Requires that companies use FBI criminal
background checks in their reviews and allow applicants
to review for accuracy; and not require individuals to
provide copies of criminal records unless there is a
clear and compelling justification.
Provides the opportunity for contextual
evaluation, companies should factor in evidence of
rehabilitation, age during time of conviction or
probation, and relevance of offense to the position.
Companies should also assume that an individual is
rehabilitated if four years has passed since the
offense and there are no other convictions.
Requires companies to consider an
individual's employment history, letters of
recommendation, participation in substance abuse
programs, successful participation in job preparation
and educational programs, and other relevant
information.
Requires prior consent of the board is
required for changes in the individual's security-
related duties or responsibilities, such as promotions
or additional credentials.
Defines criminal offenses involving
dishonesty.
Section 4. Review and report to Congress
Requires the FDIC and the NCUA to review the
rates and approval and denial for consent application;
this information must be made available to the public.
Requires a report to congress involving
recommendations for expanding employment opportunities
for those with past minor criminal offenses.
Hearings
For the purposes of section 3(c)(6) of House rule XIII, the
Committee on Financial Services' Full Committee held a hearing
on May 19, 2021 to consider H.R. 5911 entitled, ``Oversight of
Prudential Regulators: Ensuring the Safety, Soundness,
Diversity, and Accountability of Depository Institutions,'' and
the Committee's Subcommittee on Diversity and Inclusion held a
hearing on September 28, 2021 to consider H.R. 5911 entitled,
``Access Denied: Eliminating Barriers and Increasing Economic
Opportunity for Justice-Involved Individuals.''
Committee Consideration
The Committee on Financial Services met in open session on
November 16, 2021 and ordered H.R. 5911 to be reported
favorably to the House with an amendment in the nature of a
substitute by a voice vote, a quorum being present.
Committee Votes and Roll Call Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following roll call votes occurred during the Committee's
consideration of H.R. 5911: An amendment in the nature of a
substitute, no. 4, offered by Mrs. Beatty was AGREED TO by
voice vote.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
Statement of Performance Goals and Objectives
Pursuant to clause (3)(c) of rule XIII of the Rules of the
House of Representatives, the goals of H.R. 5911 are to reduce
employment barriers for applicants with minor criminal
histories at banks and credit unions.
New Budget Authority and CBO Cost Estimate
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a) of the
Congressional Budget Act of 1974, and pursuant to clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee has received the following estimate for
H.R. 5911 from the Director of the Congressional Budget Office:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 5911 would amend statutory prohibitions and
limitations that restrict the hiring of certain individuals
convicted of criminal offenses by insured depository
institutions and insured credit unions. Under current law, some
convictions prohibit a person from being employed by such
institutions without prior consent of the National Credit Union
Administration (NCUA) or the Federal Deposit Insurance
Corporation (FDIC). Under H.R. 5911, both agencies would be
required to issue a rule to provide additional exemptions from
consent requirements. The bill also would direct the FDIC and
NCUA to establish new procedures governing the review of
consent applications and further define what offenses require
agency consent. Lastly, each agency would be required to report
to the Congress on the outcomes of those changes.
The operating costs for the FDIC and NCUA are classified as
direct spending. Using information from both of those agencies,
CBO estimates that each agency would require about two
employees to complete the bill's requirements over a three-year
period, increasing gross direct spending by about $2 million
over the 2022-2031 period. However, the NCUA collects fees from
credit unions to offset its operating costs; those fees are
treated as reductions in direct spending. Thus, on net, CBO
estimates that enacting the bill would increase direct spending
by $1 million over the same period.
If the NCUA increased annual fee collections to offset the
costs associated with implementing the bill, H.R. 5911 would
increase the cost of an existing private-sector mandate on
entities required to pay those fees. CBO estimates that the
incremental cost of the mandate would be small and would fall
below the thresholds established in the Unfunded Mandates
Reform Act (UMRA) for private-sector mandates ($170 million in
2021, adjusted annually for inflation).
H.R. 5911 contains no intergovernmental mandates as defined
in UMRA.
The CBO staff contact for this estimate is Stephen Rabent
(for federal costs) and Rachel Austin (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Director
of Budget Analysis.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 5911.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when the committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act (as amended by Section 101(a)(2) of the
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee
adopts as its own the estimate of federal mandates regarding
H.R. 5911, as amended, prepared by the Director of the
Congressional Budget Office.
Advisory Committee
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Application of Law to the Legislative Branch
Pursuant to section 102(b)(3) of the Congressional
Accountability Act, Pub. L. No. 104-1, H.R. 5911, as amended,
does not apply to terms and conditions of employment or to
access to public services or accommodations within the
legislative branch.
Earmark Statement
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 5911 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as described in clauses 9(e), 9(f), and 9(g) of rule
XXI.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of H.R. 5911 establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Changes to Existing Law
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, H.R. 5911, as reported, are shown as follows:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
SEC. 19. PENALTY FOR UNAUTHORIZED PARTICIPATION BY CONVICTED
INDIVIDUAL.
(a) Prohibition.--
(1) In general.--Except with the prior written
consent of the Corporation--
(A) any person who has been convicted of any
criminal offense involving dishonesty or a
breach of trust or money laundering, or has
agreed to enter into a pretrial diversion or
similar program in connection with a
prosecution for such offense, may not--
(i) become, or continue as, an
institution-affiliated party with
respect to any insured depository
institution;
(ii) own or control, directly or
indirectly, any insured depository
institution; or
(iii) otherwise participate, directly
or indirectly, in the conduct of the
affairs of any insured depository
institution; and
(B) any insured depository institution may
not permit any person referred to in
subparagraph (A) to engage in any conduct or
continue any relationship prohibited under such
subparagraph.
(2) Minimum 10-year prohibition period for certain
offenses.--
(A) In general.--If the offense referred to
in paragraph (1)(A) in connection with any
person referred to in such paragraph is--
(i) an offense under--
(I) section 215, 656, 657,
1005, 1006, 1007, 1008, 1014,
1032, 1344, 1517, 1956, or 1957
of title 18, United States
Code; or
(II) section 1341 or 1343 of
such title which affects any
financial institution (as
defined in section 20 of such
title); or
(ii) the offense of conspiring to
commit any such offense,
the Corporation may not consent to any
exception to the application of paragraph (1)
to such person during the 10-year period
beginning on the date the conviction or the
agreement of the person becomes final.
(B) Exception by order of sentencing court.--
(i) In general.--On motion of the
Corporation, the court in which the
conviction or the agreement of a person
referred to in subparagraph (A) has
been entered may grant an exception to
the application of paragraph (1) to
such person if granting the exception
is in the interest of justice.
(ii) Period for filing.--A motion may
be filed under clause (i) at any time
during the 10-year period described in
subparagraph (A) with regard to the
person on whose behalf such motion is
made.
(b) Penalty.--Whoever knowingly violates subsection (a) shall
be fined not more than $1,000,000 for each day such prohibition
is violated or imprisoned for not more than 5 years, or both.
(c) Exceptions.--
(1) Certain older offenses.--
(A) In general.--With respect to an
individual, subsection (a) shall not apply to
an offense if--
(i) it has been 7 years or more since
the offense occurred; or
(ii) the individual was incarcerated
with respect to the offense and it has
been 5 years or more since the
individual was released from
incarceration.
(B) Offenses committed by individuals 21 or
younger.--For individuals who committed an
offense when they were 21 years of age or
younger, subsection (a) shall not apply to the
offense if it has been more than 30 months
since the sentencing occurred.
(C) Limitation.--This paragraph shall not
apply to an offense described under subsection
(a)(2).
(2) Expungement and sealing.--With respect to an
individual, subsection (a) shall not apply to an
offense if--
(A) there is an order of expungement,
sealing, or dismissal that has been issued in
regard to the conviction in connection with
such offense; and
(B) it is intended by the language in the
order itself, or in the legislative provisions
under which the order was issued, that the
conviction shall be destroyed or sealed from
the individual's State or Federal record, even
if exceptions allow the record to be considered
for certain character and fitness evaluation
purposes.
(3) De minimis exemption.--
(A) In general.--Subsection (a) shall not
apply to such de minimis offenses as the
Corporation determines, by rule.
(B) Confinement criteria.--In issuing rules
under subparagraph (A), the Corporation shall
include a requirement that the offense was
punishable by a term of three years or less
confined in a correctional facility, where such
confinement--
(i) is calculated based on the time
an individual spent incarcerated as a
punishment or a sanction, not as
pretrial detention; and
(ii) does not include probation or
parole where an individual was
restricted to a particular jurisdiction
or was required to report occasionally
to an individual or a specific
location.
(C) Bad check criteria.--In setting the
criteria for de minimis offenses under
subparagraph (A), if the Corporation
establishes criteria with respect to
insufficient funds checks, the Corporation
shall require that the aggregate total face
value of all insufficient funds checks across
all convictions or program entries related to
insufficient funds checks is $2,000 or less.
(D) Designated lesser offenses.--Subsection
(a) shall not apply to certain lesser offenses
(including the use of a fake ID, shoplifting,
trespass, fare evasion, driving with an expired
license or tag, and such other low-risk
offenses as the Corporation may designate) if 1
year or more has passed since the applicable
conviction or program entry.
(d) Bank Holding Companies.--
(1) In general.--Subsections (a) and (b) shall apply
to any company (other than a foreign bank) that is a
bank holding company and any organization organized and
operated under section 25A of the Federal Reserve Act
or operating under section 25 of the Federal Reserve
Act, as if such bank holding company or organization
were an insured depository institution, except that
such subsections shall be applied for purposes of this
subsection by substituting ``Board of Governors of the
Federal Reserve System'' for ``Corporation'' each place
that term appears in such subsections.
(2) Authority of board.--The Board of Governors of
the Federal Reserve System may provide exemptions, by
regulation or order, from the application of paragraph
(1) if the exemption is consistent with the purposes of
this subsection.
(e) Savings and Loan Holding Companies.--
(1) In general.--Subsections (a) and (b) shall apply
to any savings and loan holding company as if such
savings and loan holding company were an insured
depository institution, except that such subsections
shall be applied for purposes of this subsection by
substituting ``Board of Governors of the Federal
Reserve System'' for ``Corporation'' each place that
term appears in such subsections.
(2) Authority of director.--The Board of Governors of
the Federal Reserve System may provide exemptions, by
regulation or order, from the application of paragraph
(1) if the exemption is consistent with the purposes of
this subsection.
(f) Consent Applications.--
(1) In general.--The Corporation shall accept consent
applications from an individual and from an insured
depository institution or depository institution
holding company on behalf of an individual that are
filed separately or contemporaneously with a regional
office of the Corporation.
(2) Sponsored applications filed with regional
offices.--Consent applications filed at a regional
office of the Corporation by an insured depository
institution or depository institution holding company
on behalf of an individual--
(A) shall be reviewed by such office;
(B) may be approved or denied by such office,
if such authority has been delegated to such
office by the Corporation; and
(C) may only be denied by such office if the
general counsel of the Corporation (or a
designee) certifies that the denial is
consistent with this section.
(3) Individual applications filed with regional
offices.--Consent applications filed at a regional
office by an individual--
(A) shall be reviewed by such office; and
(B) may be approved or denied by such office,
if such authority has been delegated to such
office by the Corporation, except with respect
to--
(i) cases involving an offense
described under subsection (a)(2); and
(ii) such other high-level security
cases as may be designated by the
Corporation.
(4) National office review.--The national office of
the Corporation shall--
(A) review any consent application with
respect to which a regional office is not
authorized to approve or deny the application;
and
(B) review any consent application that is
denied by a regional office, if the individual
requests a review by the national office.
(5) Forms and instructions.--
(A) Availability.--The Corporation shall make
all forms and instructions related to consent
applications available to the public, including
on the website of the Corporation.
(B) Contents.--The forms and instructions
described under subparagraph (A) shall provide
a sample cover letter and a comprehensive list
of items that may accompany the application,
including clear guidance on evidence that may
support a finding of rehabilitation.
(6) Consideration of criminal history.--
(A) Regional office consideration.--In
reviewing a consent application, a regional
office shall--
(i) primarily rely on the criminal
history record of the Federal Bureau of
Investigation; and
(ii) provide such record to the
applicant to review for accuracy.
(B) Certified copies.--The Corporation may
not require an applicant to provide certified
copies of criminal history records unless the
Corporation determines that there is a clear
and compelling justification to require
additional information to verify the accuracy
of the criminal history record of the Federal
Bureau of Investigation.
(7) Consideration of rehabilitation.--Consistent with
title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.), the Corporation shall--
(A) conduct an individualized assessment when
evaluating consent applications that takes into
account evidence of rehabilitation, the
applicant's age at the time of the conviction
or program entry, the time that has elapsed
since conviction or program entry, and the
relationship of individual's offense to the
responsibilities of the applicable position;
(B) consider the individual's employment
history, letters of recommendation,
certificates documenting participation in
substance abuse programs, successful
participating in job preparation and
educational programs, and other relevant
mitigating evidence; and
(C) consider any additional information the
Corporation determines necessary for safety and
soundness.
(8) Scope of employment.--With respect to an approved
consent application filed by an insured depository
institution or depository institution holding company
on behalf of an individual, if the Corporation
determines it appropriate, such approved consent
application shall allow the individual to work for the
same employer (without restrictions on the location)
and across positions, except that the prior consent of
the Corporation (which may require a new application)
shall be required for any proposed significant changes
in the individual's security-related duties or
responsibilities, such as promotion to an officer or
other positions that the employer determines will
require higher security screening credentials.
(9) Coordination with the ncua.--In carrying out this
section, the Corporation shall consult and coordinate
with the National Credit Union Administration as needed
to promote consistent implementation where appropriate.
(g) Definitions.--In this section:
(1) Consent application.--The term ``consent
application'' means an application filed with
Corporation by an individual (or by an insured
depository institution or depository institution
holding company on behalf of an individual) seeking the
written consent of the Corporation under subsection
(a)(1).
(2) Criminal offense involving dishonesty.--The term
``criminal offense involving dishonesty''--
(A) means an offense under which an
individual, directly or indirectly--
(i) cheats or defrauds; or
(ii) wrongfully takes property
belonging to another in violation of a
criminal statute;
(B) includes an offense that Federal, State,
or local law defines as dishonest, or for which
dishonesty is an element of the offense; and
(C) does not include--
(i) a misdemeanor criminal offense
committed more than one year before the
date on which an individual files a
consent application, excluding any
period of incarceration; or
(ii) an offense involving the
possession of controlled substances.
(3) Pretrial diversion or similar program.--The term
``pretrial diversion or similar program'' means a
program characterized by a suspension or eventual
dismissal or reversal of charges or criminal
prosecution upon agreement by the accused to
restitution, drug or alcohol rehabilitation, anger
management, or community service.
* * * * * * *
----------
FEDERAL CREDIT UNION ACT
* * * * * * *
TITLE II--SHARE INSURANCE
* * * * * * *
requirements governing insured credit unions
Sec. 205. (a) Insurance Logo.--
(1) Insured credit unions.--
(A) In general.--Each insured credit union
shall display at each place of business
maintained by that credit union a sign or signs
relating to the insurance of the share accounts
of the institution, in accordance with
regulations to be prescribed by the Board.
(B) Statement to be included.--Each sign
required under subparagraph (A) shall include a
statement that insured share accounts are
backed by the full faith and credit of the
United States Government.
(2) Regulations.--The Board shall prescribe
regulations to carry out this subsection, including
regulations governing the substance of signs required
by paragraph (1) and the manner of display or use of
such signs.
(3) Penalties.--For each day that an insured credit
union continues to violate this subsection or any
regulation issued under this subsection, it shall be
subject to a penalty of not more than $100, which the
Board may recover for its use.
(b)(1) Except as provided in paragraph (2), no insured credit
union shall, without the prior approval of the Board--
(A) merge or consolidate with any noninsured credit
union or institution;
(B) assume liability to pay any member accounts in,
or similar liabilities of, any noninsured credit union
or institution;
(C) transfer assets to any noninsured credit union or
institution in consideration of the assumption of
liabilities for any portion of the member accounts in
such insured credit union; or
(D) convert into a noninsured credit union or
institution.
(2) Conversion of insured credit unions to mutual
savings banks.--
(A) In general.--Notwithstanding paragraph
(1), an insured credit union may convert to a
mutual savings bank or savings association (if
the savings association is in mutual form), as
those terms are defined in section 3 of the
Federal Deposit Insurance Act, without the
prior approval of the Board, subject to the
requirements and procedures set forth in the
laws and regulations governing mutual savings
banks and savings associations.
(B) Conversion proposal.--A proposal for a
conversion described in subparagraph (A) shall
first be approved, and a date set for a vote
thereon by the members (either at a meeting to
be held on that date or by written ballot to be
filed on or before that date), by a majority of
the directors of the insured credit union.
Approval of the proposal for conversion shall
be by the affirmative vote of a majority of the
members of the insured credit union who vote on
the proposal.
(C) Notice of proposal to members.--An
insured credit union that proposes to convert
to a mutual savings bank or savings association
under subparagraph (A) shall submit notice to
each of its members who is eligible to vote on
the matter of its intent to convert--
(i) 90 days before the date of the
member vote on the conversion;
(ii) 60 days before the date of the
member vote on the conversion; and
(iii) 30 days before the date of the
member vote on the conversion.
(D) Notice of proposal to board.--The Board
may require an insured credit union that
proposes to convert to a mutual savings bank or
savings association under subparagraph (A) to
submit a notice to the Board of its intent to
convert during the 90-day period preceding the
date of the completion of the conversion.
(E) Inapplicability of act upon conversion.--
Upon completion of a conversion described in
subparagraph (A), the credit union shall no
longer be subject to any of the provisions of
this Act.
(F) Limit on compensation of officials.--
(i) In general.--No director or
senior management official of an
insured credit union may receive any
economic benefit in connection with a
conversion of the credit union as
described in subparagraph (A), other
than--
(I) director fees; and
(II) compensation and other
benefits paid to directors or
senior management officials of
the converted institution in
the ordinary course of
business.
(ii) Senior management official.--For
purposes of this subparagraph, the term
``senior management official'' means a
chief executive officer, an assistant
chief executive officer, a chief
financial officer, and any other senior
executive officer (as defined by the
appropriate Federal banking agency
pursuant to section 32 (f) of the
Federal Deposit Insurance Act).
(G) Consistent rules.--
(i) In general.--Not later than 6
months after the date of enactment of
the Credit Union Membership Access Act,
the Administration shall promulgate
final rules applicable to charter
conversions described in this paragraph
that are consistent with rules
promulgated by other financial
regulators, including the Office of the
Comptroller of the Currency. The rules
required by this clause shall provide
that charter conversion by an insured
credit union shall be subject to
regulation that is no more or less
restrictive than that applicable to
charter conversions by other financial
institutions.
(ii) Oversight of member vote.--The
member vote concerning charter
conversion under this paragraph shall
be administered by the Administration,
and shall be verified by the Federal or
State regulatory agency that would have
jurisdiction over the institution after
the conversion. If either the
Administration or that regulatory
agency disapproves of the methods by
which the member vote was taken or
procedures applicable to the member
vote, the member vote shall be taken
again, as directed by the
Administration or the agency.
(3) Except with the prior written approval of the Board, no
insured credit union shall merge or consolidate with any other
insured credit union or, either directly or indirectly, acquire
the assets of, or assume liability to pay any member accounts
in, any other insured credit union.
(c) In granting or withholding approval or consent under
subsection (b) of this section, the Board shall consider--
(1) the history, financial condition, and management
policies of the credit union;
(2) the adequacy of the credit union's reserves;
(3) the economic advisability of the transaction;
(4) the general character and fitness of the credit
union's management;
(5) the convenience and needs of the members to be
served by the credit union; and
(6) whether the credit union is a cooperative
association organized for the purpose of promoting
thrift among its members and creating a source of
credit for provident or productive purposes.
(d) Prohibition.--
(1) In general.--Except with prior written consent of
the Board--
(A) any person who has been convicted of any
criminal offense involving dishonesty or a
breach of trust, or has agreed to enter into a
pretrial diversion or similar program in
connection with a prosecution for such offense,
may not--
(i) become, or continue as, an
institution-affiliated party with
respect to any insured credit union; or
(ii) otherwise participate, directly
or indirectly, in the conduct of the
affairs of any insured credit union;
and
(B) any insured credit union may not permit
any person referred to in subparagraph (A) to
engage in any conduct or continue any
relationship prohibited under such
subparagraph.
(2) Minimum 10-year prohibition period for certain
offenses.--
(A) In general.--If the offense referred to
in paragraph (1)(A) in connection with any
person referred to in such paragraph is--
(i) an offense under--
(I) section 215, 656, 657,
1005, 1006, 1007, 1008, 1014,
1032, 1344, 1517, 1956, or 1957
of title 18, United States
Code; or
(II) section 1341 or 1343 of
such title which affects any
financial institution (as
defined in section 20 of such
title); or
(ii) the offense of conspiring to
commit any such offense,
the Board may not consent to any exception to
the application of paragraph (1) to such person
during the 10-year period beginning on the date
the conviction or the agreement of the person
becomes final.
(B) Exception by order of sentencing court.--
(i) In general.--On motion of the
Board, the court in which the
conviction or the agreement of a person
referred to in subparagraph (A) has
been entered may grant an exception to
the application of paragraph (1) to
such person if granting the exception
is in the interest of justice.
(ii) Period for filing.--A motion may
be filed under clause (i) at any time
during the 10-year period described in
subparagraph (A) with regard to the
person on whose behalf such motion is
made.
(3) Penalty.--Whoever knowingly violates paragraph
(1) or (2) shall be fined not more than $1,000,000 for
each day such prohibition is violated or imprisoned for
not more than 5 years, or both.
(4) Exceptions.--
(A) Certain older offenses.--
(i) In general.--With respect to an
individual, paragraph (1) shall not
apply to an offense if--
(I) it has been 7 years or
more since the offense
occurred; or
(II) the individual was
incarcerated with respect to
the offense and it has been 5
years or more since the
individual was released from
incarceration.
(ii) Offenses committed by
individuals 21 or younger.--For
individuals who committed an offense
when they were 21 years of age or
younger, paragraph (1) shall not apply
to the offense if it has been more than
30 months since the sentencing
occurred.
(iii) Limitation.--This subparagraph
shall not apply to an offense described
under paragraph (1)(B).
(B) Expungement and sealing.--With respect to
an individual, paragraph (1) shall not apply to
an offense if--
(i) there is an order of expungement,
sealing, or dismissal that has been
issued in regard to the conviction in
connection with such offense; and
(ii) it is intended by the language
in the order itself, or in the
legislative provisions under which the
order was issued, that the conviction
shall be destroyed or sealed from the
individual's State or Federal record,
even if exceptions allow the record to
be considered for certain character and
fitness evaluation purposes.
(C) De minimis exemption.--
(i) In general.--Paragraph (1) shall
not apply to such de minimis offenses
as the Board determines, by rule.
(ii) Confinement criteria.--In
issuing rules under clause (i), the
Board shall include a requirement that
the offense was punishable by a term of
three years or less confined in a
correctional facility, where such
confinement--
(I) is calculated based on
the time an individual spent
incarcerated as a punishment or
a sanction, not as pretrial
detention; and
(II) does not include
probation or parole where an
individual was restricted to a
particular jurisdiction or was
required to report occasionally
to an individual or a specific
location.
(iii) Bad check criteria.--In setting
the criteria for de minimis offenses
under clause (i), if the Board
establishes criteria with respect to
insufficient funds checks, the Board
shall require that the aggregate total
face value of all insufficient funds
checks across all convictions or
program entries related to insufficient
funds checks is $2,000 or less.
(iv) Designated lesser offenses.--
Paragraph (1) shall not apply to
certain lesser offenses (including the
use of a fake ID, shoplifting,
trespass, fare evasion, driving with an
expired license or tag, and such other
low-risk offenses as the Board may
designate) if 1 year or more has passed
since the applicable conviction or
program entry.
(5) Consent applications.--
(A) In general.--The Board shall accept
consent applications from an individual and
from an insured credit union on behalf of an
individual that are filed separately or
contemporaneously with a regional office of the
Board.
(B) Sponsored applications filed with
regional offices.--Consent applications filed
at a regional office of the Board by an insured
credit union on behalf of an individual--
(i) shall be reviewed by such office;
(ii) may be approved or denied by
such office, if such authority has been
delegated to such office by the Board;
and
(iii) may only be denied by such
office if the general counsel of the
Board (or a designee) certifies that
the denial is consistent with this
section.
(C) Individual applications filed with
regional offices.--Consent applications filed
at a regional office by an individual--
(i) shall be reviewed by such office;
and
(ii) may be approved or denied by
such office, if such authority has been
delegated to such office by the Board,
except with respect to--
(I) cases involving an
offense described under
paragraph (1)(B); and
(II) such other high-level
security cases as may be
designated by the Board.
(D) National office review.--The national
office of the Board shall--
(i) review any consent application
with respect to which a regional office
is not authorized to approve or deny
the application; and
(ii) review any consent application
that is denied by a regional office, if
the individual requests a review by the
national office.
(E) Forms and instructions.--
(i) Availability.--The Board shall
make all forms and instructions related
to consent applications available to
the public, including on the website of
the Board.
(ii) Contents.--The forms and
instructions described under clause (i)
shall provide a sample cover letter and
a comprehensive list of items that may
accompany the application, including
clear guidance on evidence that may
support a finding of rehabilitation.
(F) Consideration of criminal history.--
(i) Regional office consideration.--
In reviewing a consent application, a
regional office shall--
(I) primarily rely on the
criminal history record of the
Federal Bureau of
Investigation; and
(II) provide such record to
the applicant to review for
accuracy.
(ii) Certified copies.--The Board may
not require an applicant to provide
certified copies of criminal history
records unless the Board determines
that there is a clear and compelling
justification to require additional
information to verify the accuracy of
the criminal history record of the
Federal Bureau of Investigation.
(G) Consideration of rehabilitation.--
Consistent with title VII of the Civil Rights
Act of 1964 (42 U.S.C. 2000e et seq.), the
Board shall--
(i) conduct an individualized
assessment when evaluating consent
applications that takes into account
evidence of rehabilitation, the
applicant's age at the time of the
conviction or program entry, the time
that has elapsed since conviction or
program entry, and the relationship of
individual's offense to the
responsibilities of the applicable
position;
(ii) consider the individual's
employment history, letters of
recommendation, certificates
documenting participation in substance
abuse programs, successful
participating in job preparation and
educational programs, and other
relevant mitigating evidence; and
(iii) consider any additional
information the Board determines
necessary for safety and soundness.
(H) Scope of employment.--With respect to an
approved consent application filed by an
insured credit union on behalf of an
individual, if the Board determines it
appropriate, such approved consent application
shall allow the individual to work for the same
employer (without restrictions on the location)
and across positions, except that the prior
consent of the Board (which may require a new
application) shall be required for any proposed
significant changes in the individual's
security-related duties or responsibilities,
such as promotion to an officer or other
positions that the employer determines will
require higher security screening credentials.
(I) Coordination with fdic.--In carrying out
this subsection, the Board shall consult and
coordinate with the Federal Deposit Insurance
Corporation as needed to promote consistent
implementation where appropriate.
(6) Definitions.--In this subsection:
(A) Consent application.--The term ``consent
application'' means an application filed with
Board by an individual (or by an insured credit
union on behalf of an individual) seeking the
written consent of the Board under paragraph
(1)(A).
(B) Criminal offense involving dishonesty.--
The term ``criminal offense involving
dishonesty''--
(i) means an offense under which an
individual, directly or indirectly--
(I) cheats or defrauds; or
(II) wrongfully takes
property belonging to another
in violation of a criminal
statute;
(ii) includes an offense that
Federal, State, or local law defines as
dishonest, or for which dishonesty is
an element of the offense; and
(iii) does not include--
(I) a misdemeanor criminal
offense committed more than one
year before the date on which
an individual files a consent
application, excluding any
period of incarceration; or
(II) an offense involving the
possession of controlled
substances.
(C) Pretrial diversion or similar program.--
The term ``pretrial diversion or similar
program'' means a program characterized by a
suspension or eventual dismissal or reversal of
charges or criminal prosecution upon agreement
by the accused to restitution, drug or alcohol
rehabilitation, anger management, or community
service.
(e)(1) The Board shall promulgate rules establishing minimum
standards with which each insured credit union must comply with
respect to the installation, maintenance, and operation of
security devices and procedures, reasonable in cost, to
discourage robberies, burglaries, and larcenies and to assist
in the identification and apprehension of persons who commit
such acts.
(2) The rules shall establish the time limits within which
insured credit unions shall comply with the standards and shall
require the submission of periodic reports with respect to the
installation, maintenance, and operation of security devices
and procedures.
(3) An insured credit union which violates a rule promulgated
pursuant to this subsection shall be subject to a civil penalty
which shall not exceed $100 for each day of the violation.
(f)(1) Every insured credit union is authorized to maintain,
and make loans with respect to, share draft accounts in
accordance with rules and regulations prescribed by the Board.
Except as provided in paragraph (2), an insured credit union
may pay dividends on share draft accounts and may permit the
owners of such share draft accounts to make withdrawals by
negotiable or transferable instruments or other orders for the
purpose of making transfers to third parties.
(2) Paragraph (1) shall apply only with respect to share
draft accounts in which the entire beneficial interest is held
by one or more individuals or members or by an organization
which is operated primarily for religious, philanthropic,
charitable, educational, or other similar purposes and which is
not operated for profit, and with respect to deposits of public
funds by an officer, employee, or agent of the United States,
any State, county, municipality, or political subdivision
thereof, the District of Columbia, the Commonwealth of Puerto
Rico, American Samoa, Guam, any territory or possession of the
United States, or any political subdivision thereof.
(g)(1) If the applicable rate prescribed in this subsection
exceeds the rate an insured credit union would be permitted to
charge in the absence of this subsection, such credit union
may, notwithstanding any State constitution or statute which is
hereby preempted for the purposes of this subsection, take,
receive, reserve, and charge on any loan, interest at a rate of
not more than 1 per centum in excess of the discount rate on
ninety-day commercial paper in effect at the Federal Reserve
bank in the Federal Reserve district where such insured credit
union is located or at the rate allowed by the laws of the
State, territory, or district where such credit union is
located, whichever may be greater.
(2) If the rate prescribed in paragraph (1) exceeds the rate
such credit union would be permitted to charge in the absence
of this subsection, and such State fixed rate is thereby
preempted by the rate described in paragraph (1), the taking,
receiving, reserving, or charging a greater rate than is
allowed by paragraph (1), when knowingly done, shall be deemed
a forfeiture of the entire interest which the loan carries with
it, or which has been agreed to be paid thereon. If such
greater rate of interest has been paid, the person who paid it
may recover, in a civil action commenced in a court of
appropriate jurisdiction not later than two years after the
date of such payment, an amount equal to twice the amount of
interest paid from the credit union taking or receiving such
interest.
(h) Notwithstanding any other provision of law, the Board may
authorize a merger or consolidation of an insured credit union
which is insolvent or is in danger of insolvency with any other
insured credit union or may authorize an insured credit union
to purchase any of the assets of, or assume any of the
liabilities of, any other insured credit union which is
insolvent or in danger of insolvency if the Board is satisfied
that--
(1) an emergency requiring expeditious action exists
with respect to such other insured credit union;
(2) other alternatives are not reasonably available;
and
(3) the public interest would best be served by
approval of such merger, consolidation, purchase, or
assumption.
(i)(1) Notwithstanding any other provision of this Act or of
State law, the Board may authorize an institution whose
deposits or accounts are insured by the Federal Deposit
Insurance Corporation to purchase any of the assets of or
assume any of the liabilities of an insured credit union which
is insolvent or in danger of insolvency, except that prior to
exercising this authority the Board must attempt to effect the
merger or consolidation of an insured credit union which is
insolvent or in danger of insolvency with another insured
credit union, as provided in subsection (h).
(2) For purposes of the authority contained in paragraph (1),
insured accounts of the credit union may upon consummation of
the purchase and assumption be converted to insured deposits or
other comparable accounts in the acquiring institution, and the
Board and the National Credit Union Share Insurance Fund shall
be absolved of any liability to the credit union's members with
respect to those accounts.
(j) Privileges Not Affected by Disclosure to Banking Agency
or Supervisor.--
(1) In general.--The submission by any person of any
information to the Administration, any State credit
union supervisor, or foreign banking authority for any
purpose in the course of any supervisory or regulatory
process of such Board, supervisor, or authority shall
not be construed as waiving, destroying, or otherwise
affecting any privilege such person may claim with
respect to such information under Federal or State law
as to any person or entity other than such Board,
supervisor, or authority.
(2) Rule of construction.--No provision of paragraph
(1) may be construed as implying or establishing that--
(A) any person waives any privilege
applicable to information that is submitted or
transferred under any circumstance to which
paragraph (1) does not apply; or
(B) any person would waive any privilege
applicable to any information by submitting the
information to the Administration, any State
credit union supervisor, or foreign banking
authority, but for this subsection.
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