Topic: Criminal Convictions and Institution-Affiliated Parties
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Are banks required to perform new background screenings for rehires?
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Yes, we believe that banks are required to perform some level of background screenings for rehires, as you would for new hires. Both Illinois and federal law prohibit banks from employing individuals who have been convicted of certain crimes, and FDIC regulations require all banks to make a “reasonable inquiry” to ensure they do not…
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What are we required to do as far as employee background checks? If an employee already has license through NMLS, do we need to do a background check? We are merging with our mortgage bank subsidiary, resulting in those mortgage loan originators (MLOs) becoming bank employees.
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Both federal and Illinois law require banks to screen for criminal convictions before hiring or serving as an employee, officer, director, or controlling stockholder. For employees that already are registered with the NMLS, you must review their criminal background reports in any event. The SAFE Act regulations require financial institutions to review criminal background reports…
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Are banks in general exempt from the new Job Opportunities for Qualified Applicants Act?
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There is a strong case for arguing that the Job Opportunities for Qualified Applicants Act exempts financial institutions, but there are counterarguments as well. Section 15(b)(1) of the Act includes an exemption for employers that “are required to exclude applicants with certain criminal convictions from employment due to federal or State law . . .…
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Has the IDFPR updated its criteria for de minimis offenses to mirror the FDIC’s 2012 changes?
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The Illinois Department of Financial and Professional Regulation (IDFPR) hasn’t updated its criteria for crimes that are considered de minimis since the FDIC’s update. The IDFPR’s most recent update was in 2005, with the publication of its Policy Statement 1009 — Guidance Concerning the Employment Practices of Regulated Institutions. We recently spoke to an attorney…
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What are the record retention requirements that apply to banks under Illinois law?
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Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021. Please note that this change may affect the continued accuracy of this guidance as it pertains to the ECSA. We are not aware of any Illinois regulations that directly address record retention for banks.…
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We are starting to register employees as loan originators under the SAFE Act, and we discovered that one employee has a criminal history. Are we required to immediately terminate the employee?
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While the SAFE Act does not require that such an employee be terminated upon discovery of such on his or her criminal background check, the employee cannot act as a loan originator without obtaining registration, a license, and a unique identifier. 12 USC 5103(a). Section 5104 of the SAFE Act sets out minimum standards for…