Employing previously convicted individuals: New NCUA guidance

In its July meeting, the NCUA Board voted to issue among other things, a proposed Interpretive Ruling and Policy Statement (IRPS 19-01) on exceptions to employment restrictions under Section 205(d) of the Federal Credit Union Act(FCU Act). The Board unanimously approved the proposed IRPS, 3-0.

Section 205(d)(1) of the FCU Act, codified at 12 U.S.C. § 1785, contains prohibitions on employing a person who has been convicted of any criminal offense involving dishonesty or breach of trust, or who has entered into a pretrial diversion or similar program in connection with a prosecution for such offense from participating directly or indirectly in the conduct of affairs of any insured credit union, except with prior written consent of the NCUA Board. This was implemented by 12 C.F.R. § 741.3(c) which applies the following criteria in determining the insurability of a credit union applying for insurance and in continuing the insurability of its accounts pursuant to title II of the Act:

“(c) Fitness of management. The officers, directors, and committee members of the credit union must have conducted its operations in accordance with provisions of applicable law, regulations, its charter and bylaws. No person shall serve as a director, officer, committee member, or employee of an insured credit union who has been convicted of any criminal offense involving dishonesty or breach of trust, except with the written consent of the Board.”

 

continue reading »

More News