Banks and credit unions may need to modify their hiring protocols in light of a new federal law that relaxes restrictions on financial institutions hiring people with criminal histories.

The fair hiring in banking provisions were included in the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, which President Joe Biden signed on Dec. 23, 2022.

Under Section 19 of the Federal Deposit Insurance Act, banks and credit unions generally cannot hire a person convicted of any crime involving dishonesty, breach of trust or money laundering.

However, under the new provisions, these restrictions no longer apply if:

• There is an order of expungement, sealing or dismissal in regard to the person's conviction.
• It has been seven years or more since the offense occurred.
• The individual was incarcerated with respect to the offense, and it has been five years or more since the individual was released from incarceration.
• The person was 21 years old or younger when they committed the offense.

The new law also expands the list of lower-risk crimes that are exempted from the hiring restrictions. The exemptions now include:

• Offenses that were punishable by three years or less in prison.
• Writing insufficient-fund checks valued at $2,000 or less.
• Lesser offenses, like the use of a fake ID, shoplifting, trespass, fare evasion or driving with an expired license or tag, if at least one year has passed since the conviction.

The new law defines the term "criminal offense...

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