Shocker: Tough New Federal Regulations Costing A Lot Of Jobs In The Banking Industry
“Thanks to new federal banking and mortgage guidelines with $1-million-a-day penalties for noncompliance, banks are scrambling to fire any employee who has previously been convicted of a crime involving dishonesty,” writes Walter Olson. That might sound like a good thing, taken at face value, but the reality isn’t so great. ”Among those tossed out: a bank employee with seven years’ service who used a slug in a washing machine in 1963, and a 58-year-old customer service representative with a shoplifting conviction forty years ago.”
More from USA Today:
The tougher standards are meant to weed out executives and mid-level bank employees guilty of transactional crimes, like identity fraud or mortgage fraud, but they are being applied across-the-board thanks to $1 million a day fines for noncompliance.
Banks have fired thousands of workers nationally because of the rules, said Natasha Buchanan, an attorney with Higbee & Associates in Santa Ana, Calif., who has helped some of the banking workers regain their eligibility to be employed.
“Banks are afraid of the FDIC and the penalties they could face,” Buchanan said.
The regulatory rules forbid the employment of anyone convicted of a crime involving dishonesty, breach of trust or money laundering. Before the guidelines were changed, banks widely interpreted the rules to exclude minor traffic offenses and some other misdemeanor arrests.
New rules have eliminated exceptions for expunged crimes and certain minor offenses and expanded the categories of employees covered, Buchanan said.
This absurdity brought to you by your federal government.
It seems to me that private institutions ought to be in charge of making their own hiring decisions. But such is state of federal encroachment on the ability of private businesses to make their own decisions that an employer can’t overlook some minor crime in a prospective employee’s past.
And we wonder why our economy won’t grow.Tags: banking, big government, Economy, jobs