Can a Felon Work at a Bank?
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It is possible but involves a specific federal hurdle: Section 19 of the Federal Deposit Insurance Act (12 U.S.C. § 1829) prohibits anyone convicted of a 'crime involving dishonesty or a breach of trust' or a felony from working at an FDIC-insured bank without the FDIC's prior written consent. This covers virtually all banks in the United States. The good news is that the FDIC does grant these approvals, and a 2020 rule change created a 'de minimis' exception that allows banks to hire people with certain minor offenses without needing individual FDIC approval. For people with non-dishonesty-related felonies or those whose convictions are old, getting FDIC consent is achievable. Convictions involving bank fraud, embezzlement, money laundering, and financial crimes 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
- ✓Felony conviction unrelated to dishonesty or breach of trust with 10+ years since sentence completion
- ✓Record has been fully expunged by a court of competent jurisdiction — FDIC treats some expungements as removing the Section 19 bar
- ✓Conviction was entered pretrial diversion or deferred adjudication that resulted in dismissal — Section 19 may not apply
- ✓Bank is willing to sponsor your Section 19 application (the bank files on your behalf)
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)
- ✗Bank is unwilling to sponsor the Section 19 application
The Section 19 waiver application must be filed by the insured institution (the bank), not the individual. If no bank is willing to hire you and file the waiver application on your behalf, you cannot obtain FDIC consent. The bank takes on supervisory responsibility when sponsoring an application. (FDIC Section 19 procedure)
Gray areas — it depends on your state and circumstances
Non-dishonesty felonies (drug offenses, DUI, assault)
Section 19 applies to all felonies, not just dishonesty-related ones. However, the FDIC evaluates waivers more favorably for offenses that did not involve dishonesty, breach of trust, or financial crime. Non-dishonesty felonies that occurred 5+ years ago with a clean record have the best chances of waiver approval. Drug possession, DUI, and non-financial violent offenses receive less scrutiny than theft, fraud, or forgery.
De minimis offenses under the 2020 FDIC rule
In 2020, the FDIC amended its Section 19 rules to create a 'de minimis' exception. Under this exception, certain offenses do not require individual FDIC approval: (1) crimes punishable by imprisonment of one year or less that did not involve dishonesty, (2) offenses where more than 5 years have passed since the conviction or completion of prison term (whichever is later) and the offense was punishable by imprisonment for 3 years or less, and (3) certain other low-level offenses. This change 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 Statement of Policy. Section 19 applies to: (1) any felony conviction, and (2) any misdemeanor conviction involving dishonesty, breach of trust, or money laundering. Check whether your conviction qualifies for the 2020 de minimis exception, which may exempt you from needing individual FDIC approval. If your conviction was expunged, pardoned, or involved pretrial diversion with dismissal, Section 19 may not apply.
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
The Section 19 application must be filed by the insured institution, not the individual. Work with the bank's compliance department to prepare the application. 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 Application Information
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 — Statement of Policy for Section 19
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?
- Yes, but it requires navigating Section 19 of the Federal Deposit Insurance Act. Section 19 prohibits anyone convicted of a crime involving dishonesty, breach of trust, or money laundering — and any felony — from working at an FDIC-insured bank without the FDIC's prior written consent. The FDIC does grant these approvals, and a 2020 rule change created a de minimis exception for many lower-level offenses. The bank must file the application on your behalf, so you need to find a bank willing to sponsor you.
- What is FDIC Section 19?
- Section 19 of the Federal Deposit Insurance Act (12 U.S.C. § 1829) makes it a crime for any person convicted of a dishonesty offense or any felony 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?
- In 2020, the FDIC amended its Section 19 rules to create exceptions for certain low-risk offenses. Under the de minimis exception, individual FDIC approval is not required for: (1) offenses punishable by imprisonment for one year or less that did not involve dishonesty or breach of trust, (2) offenses where more than 5 years have passed since conviction or prison release and the offense was punishable by 3 years or less imprisonment, and (3) certain other specific categories. This significantly expanded banking employment opportunities.
- 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.