[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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