Topic: Employee Background Checks
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Should banks perform background and credit checks on prospective board members?
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Yes, we believe banks should perform criminal background checks on prospective board members, as both Illinois and federal law prohibit individuals who have been convicted of certain crimes from serving as directors or otherwise participating, “directly or indirectly, in the conduct of the affairs of any insured depository institution.” We are not aware of any…
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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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We are interviewing a candidate for employment, and received authorization to examine the candidate’s credit report. Can we ask about collection items that appear on the report?
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We do not see any problems with asking an employment applicant about collections items on the applicant’s credit report. The Fair Credit Reporting Act (FCRA) expressly allows you to obtain a “consumer report” for any “employment purpose,” provided that you follow the disclosure and authorization requirements. 15 USC 1681b(b)(1). (Also, while not applicable here, note…