Can a Felon Work at a Bank?
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Maybe — and less often than you might think, because Section 19 (12 U.S.C. § 1829) is narrower than most people assume. It applies to convictions for offenses involving dishonesty, breach of trust, or money laundering — whether felony or misdemeanor — and to people who entered pretrial diversion for such offenses. It does NOT cover every felony: a non-dishonesty felony (felony DUI, simple assault, drug possession) generally does not trigger Section 19 at all. Separately, specified Title 18 bank-crime felonies carry a 10-year minimum before the FDIC may even consider consent (§ 1829(a)(2)). The 2020 de minimis rule and the Fair Hiring in Banking Act of 2022 removed many older minor offenses from Section 19's scope entirely, and since October 1, 2024 individuals can file consent applications directly with the FDIC — a sponsoring bank is no longer required. Convictions for bank fraud, embezzlement, and money laundering still face the highest scrutiny.
You CAN likely work at a bank if you...
- ✓Felony conviction that qualifies for the FDIC 'de minimis' exception — certain minor offenses now do not require individual FDIC approval
- ✓FDIC grants a Section 19 waiver application after reviewing your criminal history and rehabilitation evidence
- ✓Non-dishonesty felony (felony DUI, assault, drug possession) — not covered by Section 19 at all, no FDIC consent needed
- ✓Record has been fully expunged by a court of competent jurisdiction — FDIC treats some expungements as removing the Section 19 bar
- ✓Deferred adjudication that ended in outright dismissal generally does not trigger Section 19 — but agreeing to a pretrial diversion program does trigger it, even if the case was later dismissed
- ✓You can file the consent application yourself — since the FDIC's rule effective October 1, 2024, the FDIC must accept individual applications (FDIC Form 6710/07) as well as bank-sponsored ones, so a sponsoring bank is no longer a prerequisite
You CANNOT work at a bank if you...
- ✗Convicted of bank fraud, embezzlement, or theft from a financial institution
Convictions for crimes directly targeting financial institutions — bank fraud, embezzlement from a bank, making false statements to a bank, misapplication of bank funds — face the highest scrutiny under Section 19. The FDIC is very unlikely to grant a waiver for these offenses, especially if they are recent. These convictions demonstrate exactly the type of risk Section 19 was designed to prevent. (12 U.S.C. § 1829 (Section 19) / 18 U.S.C. § 1344)
- ✗Convicted of money laundering
Money laundering convictions are treated as involving both dishonesty and a direct threat to the banking system. The FDIC is extremely reluctant to approve waivers for money laundering convictions. These offenses are considered fundamentally incompatible with banking employment. (18 U.S.C. § 1956-1957 / 12 U.S.C. § 1829)
- ✗Multiple dishonesty-related convictions
A pattern of dishonesty-related convictions — even if individually minor — significantly reduces the likelihood of FDIC waiver approval. The FDIC considers the totality of the applicant's criminal history, and multiple offenses suggest a pattern rather than an isolated incident. (12 U.S.C. § 1829 / FDIC Statement of Policy)
- ✗Specified Title 18 bank-crime felony within the 10-year minimum window
For specified Title 18 bank crimes (bank fraud, embezzlement, false statements to a bank, misapplication of funds), the FDIC may not even consider consent until at least 10 years have passed since the conviction or release from incarceration. If you are inside that 10-year window for one of these offenses, consent is not available yet — waiting it out is the only path. (12 U.S.C. § 1829(a)(2) (as amended by the Fair Hiring in Banking Act of 2022))
Gray areas — it depends on your state and circumstances
Non-dishonesty felonies (drug offenses, DUI, assault)
Section 19 (12 U.S.C. § 1829(a)(1)) covers only offenses involving dishonesty, breach of trust, or money laundering — not every felony. A drug-possession, DUI, or assault conviction does not trigger Section 19 at all, so no FDIC consent is needed for these (though banks still run their own background checks and can decline on their own judgment). Note that drug possession is also carved out of the statutory definition of a dishonesty offense (§ 1829(g)(2)(C)). Convictions involving fraud, theft, or forgery — at any level, felony or misdemeanor — are the ones that trigger the bar.
De minimis offenses under the 2020 FDIC rule
Under the current rule (12 U.S.C. § 1829(c), (g); FDIC 2020 final rule, 85 FR 51312): expunged or sealed convictions never trigger Section 19; the bar lapses 7 years after the offense occurred (or 5 years after release from incarceration); offenses committed at age 21 or younger drop away after 30 months; misdemeanor dishonesty offenses older than one year (excluding incarceration time) and drug-possession offenses are excluded from the definition of a covered offense; and designated minor offenses (shoplifting, trespass, fare evasion, fake ID) fall away after one year. These changes significantly expanded access to banking employment.
Expunged or pardoned convictions
The FDIC recognizes certain forms of record relief. A full expungement by a court of competent jurisdiction may remove the Section 19 bar entirely. A governor's or presidential pardon may also remove the bar. However, deferred adjudications, diversions, and 'certificates of rehabilitation' that do not formally vacate the conviction may not remove the Section 19 prohibition. The specific legal effect depends on the jurisdiction and the nature of the record relief.
Credit unions, insurance companies, and non-bank financial services
Section 19 specifically applies to FDIC-insured institutions. Credit unions are covered by a similar provision under the Federal Credit Union Act. However, non-bank financial companies — insurance companies, investment firms, mortgage companies, fintech companies — are not subject to Section 19. These can be alternative paths into financial services, though they have their own background check requirements.
Dishonesty misdemeanors (shoplifting, petty theft, bad checks)
Section 19 covers crimes involving dishonesty regardless of whether they are felonies or misdemeanors. A misdemeanor shoplifting conviction can trigger the Section 19 bar just like a felony. However, the 2020 de minimis exception covers many low-level dishonesty offenses where more than 5 years have passed. For older, minor dishonesty misdemeanors, the de minimis exception may apply without needing individual FDIC approval.
Banking Roles — Accessibility by Position Type
| Type | Difficulty | Details |
|---|---|---|
| Teller / Customer Service | Moderate — Section 19 Waiver Often Achievable | Bank teller and customer service positions involve direct cash handling and customer interaction. Section 19 applies, requiring FDIC consent for any covered conviction. For non-dishonesty felonies that occurred several years ago, waivers are commonly granted for these entry-level positions. The bank must be willing to sponsor the application. |
| Back Office / Operations | Moderate | Back office positions (data entry, document processing, IT support) may involve less direct customer and cash contact but are still covered by Section 19 if you are employed by an insured institution. The same waiver process applies, though some banks may be more willing to sponsor waivers for non-customer-facing roles. |
| Loan Officer / Financial Advisor | Difficult | Positions involving lending decisions, financial advice, or fiduciary duties face higher scrutiny. Dishonesty and financial crime convictions are particularly problematic for these roles. The FDIC and the bank will both carefully evaluate whether the applicant's history is compatible with the trust required for these positions. |
| Non-Bank Financial Services | More Accessible — No Section 19 | Positions at non-bank financial companies — insurance agencies, mortgage brokers, fintech companies, financial planning firms — are not subject to Section 19. These companies conduct their own background checks and make independent hiring decisions. While financial crimes are still scrutinized, the absence of the FDIC approval requirement makes these positions more accessible. |
How to Apply — Step by Step
Determine if your conviction triggers Section 19
Review 12 U.S.C. § 1829 and the FDIC's Section 19 guidance. Section 19 applies to: (1) any conviction — felony or misdemeanor — for an offense involving dishonesty, breach of trust, or money laundering, and (2) anyone who agreed to enter a pretrial diversion or similar program in connection with such an offense. Non-dishonesty felonies do not trigger it. Check whether your conviction falls into an exception: expunged or sealed records, offenses older than 7 years (or 5 years since release), offenses committed at 21 or younger once 30 months pass, misdemeanor dishonesty offenses older than one year, and drug-possession offenses are all outside Section 19's scope.
Apply for bank positions — be upfront about your history
Apply for positions at FDIC-insured banks. Many banks are familiar with the Section 19 waiver process and willing to sponsor qualified applicants. Community banks and credit unions may be more willing than large national banks. Be honest about your criminal history — the bank needs to know in order to file the waiver application. Focus on demonstrating your qualifications and reliability.
Work with the bank to file the Section 19 application
You can file the Section 19 application yourself — the Fair Hiring in Banking Act of 2022 and the FDIC's implementing rule (effective October 1, 2024) require the FDIC to accept individual applications (FDIC Form 6710/07) as well as bank-sponsored ones. If a bank is willing to sponsor the application, its compliance department can prepare it with you. You will need to provide: certified court documents for all convictions, a personal statement explaining the circumstances and your rehabilitation, character reference letters, employment history, and evidence of community involvement.
Gather strong rehabilitation evidence
The FDIC evaluates: the nature and circumstances of the conviction, evidence of rehabilitation, the position to be held and its responsibilities, the amount of time since the conviction, the applicant's overall criminal history, and the bank's ability to supervise the employee. Strong rehabilitation evidence includes: stable employment, education, community involvement, no subsequent offenses, and character references from employers and community leaders.
Wait for FDIC determination
The FDIC regional office reviews the application and makes a determination. Processing times vary but typically take 2-6 months. The FDIC may request additional information or documentation. If approved, the consent may include conditions such as specific position restrictions, periodic reporting, or supervision requirements. If denied, you may reapply after addressing the FDIC's concerns.
Consider non-bank financial services as alternatives
If bank employment is not achievable, consider non-bank financial services: insurance companies, mortgage companies, fintech companies, financial planning firms, accounting firms, and payroll companies. These employers are not subject to Section 19 and make their own hiring decisions. Many positions in financial services do not require the FDIC waiver process.
Take Action — Direct Links
- FDIC — Section 19 of the FDI Act (current guidance)
Official FDIC page on Section 19, including application forms, the statement of policy, and the de minimis exception guidance
- 12 U.S.C. § 1829 — Full text of Section 19
Full text of the federal statute prohibiting people with certain convictions from working at FDIC-insured banks without FDIC consent
- FDIC — Section 19 Application Instructions (Form 6710/07)
FDIC's detailed policy guidance on how it evaluates Section 19 waiver applications, including the 2020 de minimis amendments
- NCUA — Prohibition on Convicted Individuals (credit unions)
National Credit Union Administration — similar prohibition for credit union employment with a comparable waiver process
- Collateral Consequences Resource Center
Resources on expungement and record relief that may remove the Section 19 bar
Frequently Asked Questions
- Can a felon work at a bank?
- Often, yes — Section 19 of the Federal Deposit Insurance Act is narrower than commonly believed. It bars people convicted of offenses involving dishonesty, breach of trust, or money laundering (felony or misdemeanor) from working at an FDIC-insured bank without FDIC consent — but it does not cover non-dishonesty felonies at all. A 2020 rule change and the Fair Hiring in Banking Act of 2022 created exceptions for many older and minor offenses, and since October 1, 2024 individuals can file consent applications directly with the FDIC — a sponsoring bank is no longer required.
- What is FDIC Section 19?
- Section 19 of the Federal Deposit Insurance Act (12 U.S.C. § 1829) makes it a federal crime for any person convicted of an offense involving dishonesty, breach of trust, or money laundering — or who agreed to enter pretrial diversion for such an offense — to 'become, or continue as' an employee or officer of an FDIC-insured bank without the FDIC's prior written consent. It also makes it a crime for the bank to employ such a person without FDIC consent. Violations can result in criminal penalties of up to $1 million in fines and up to 5 years imprisonment. This is why banks take the requirement seriously.
- What is the FDIC de minimis exception?
- Under the current framework (12 U.S.C. § 1829(c), (g); FDIC final rule, 85 FR 51312), no FDIC application is required when: the conviction was expunged or sealed; 7 years have passed since the offense (or 5 years since release from incarceration); the offense was committed at age 21 or younger and more than 30 months have passed since sentencing; the offense is a misdemeanor dishonesty offense more than one year old; or the offense is drug possession. Designated minor offenses (shoplifting, trespass, fare evasion, fake ID) also fall away after one year. This significantly expanded banking employment opportunities.
- What changed in 2022-2024?
- A lot. The Fair Hiring in Banking Act (signed December 23, 2022) and the FDIC's final rule (effective October 1, 2024) let individuals file consent applications directly instead of requiring a bank to sponsor them, removed most older minor offenses from Section 19's scope (7-year/5-year lapse, 30-month rule for offenses committed at 21 or younger), and excluded expunged and sealed convictions entirely. If you read older guides saying you must find a sponsoring bank first, that information is out of date.
- How long does the Section 19 waiver process take?
- The FDIC Section 19 waiver process typically takes 2-6 months from application submission to determination. The timeline depends on the complexity of the case, the FDIC regional office's workload, and whether additional information is needed. During this time, you cannot work at the bank in any capacity. Some banks may hire you in a non-covered role (e.g., as a contractor) while the waiver is pending, but this is uncommon.
- Can I work at a credit union with a felony?
- Credit unions are covered by a similar provision under the Federal Credit Union Act, which prohibits individuals with certain convictions from working at federally insured credit unions without NCUA (National Credit Union Administration) approval. The process is similar to the FDIC Section 19 waiver. However, community-based credit unions may be more sympathetic to applicants with records and more willing to sponsor waiver applications than large commercial banks.
- Does an expunged record affect Section 19?
- The FDIC recognizes certain forms of record relief. A full expungement by a court order may remove the Section 19 bar, meaning no FDIC consent is needed. However, the type of expungement matters. A formal court order vacating the conviction is stronger than a record sealing. Deferred adjudications or diversions that resulted in dismissal (not conviction) generally do not trigger Section 19. Consult with an attorney familiar with Section 19 to evaluate whether your specific form of record relief removes the prohibition.
- What financial services jobs can a felon get without Section 19?
- Section 19 only applies to FDIC-insured institutions (banks) and similar provisions apply to credit unions. Non-bank financial services companies are not subject to Section 19. Potential alternatives include: insurance companies, mortgage companies, fintech companies, financial advisory firms, accounting firms, payroll processing companies, and debt collection agencies. These employers conduct their own background checks but are not bound by the federal banking prohibition.
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