The U.S. labor shortage is placing new urgency on the search for workers, and some of the top U.S. banks say people with criminal records should be part of the solution.
The Bank Policy Institute, an advocacy group that counts JPMorgan Chase and Bank of America Corp. among its members, is planning a lobbying effort to persuade Congress to ease restrictions on the hiring strategy.
“There is a really huge demand for talent in every industry in every labor market, and this is a talented set of individuals who can and should be able to contribute in this labor market,” Michelle Kuranty, JPMorgan’s executive director of talent acquisition sourcing, said in an interview.
JPMorgan gave jobs to 2,100 people with a criminal record in the U.S. last year, 10% of all new hires. Chief Executive Officer Jamie Dimon co-chairs the Second Chance Business Coalition, a group of large companies committed to expanding opportunities for such people. Bank of America, Mastercard and Visa are also among the members.
The finance industry is grappling with the same labor shortages as the rest of corporate America amid what’s been dubbed the “Great Resignation.” The quit rate — the number of people voluntarily leaving their jobs in a month as a percent of total employment — increased to a record 2.9% in August, and there were 10.4 million job vacancies, near July’s all-time high.
Adding more workers with spotty records could address those pinch points while at the same time helping banks meet their environmental, social and governance goals.
Under Section 19 of the Federal Deposit Insurance Act, individuals with criminal records must receive government approval to work at a bank. A series of changes to the rule have given more leeway to people with minor offenses or some who were convicted before age 21. But now banks want to amend the law once and for all to eliminate major hiring hurdles.
“Jobs out there are judgmental,” said Betsy Davis, 33, from Columbus, Ohio, who spent two years on probation for aggravated menacing and animal cruelty. She said many companies won’t hire applicants with a criminal record because they’re afraid of creating potential liabilities.
“Once you get declined once or twice from a job, you start to doubt that you’re ever going to be able to be accepted back into the community,” said Davis, who had her records sealed last month with help from the Columbus Legal Aid Society. “What Chase is doing is giving people second chances.”
Davis said she would apply for a job at the company had she not already begun studying for a medical degree to become a billing and coding professional.
Dafina Stewart, senior vice president and associate general counsel at the Bank Policy Institute, said changes are needed to the law to help more people like Davis.
“There’s only so far that a regulator can go without going outside the bounds of their authority under the statute,” Stewart said. “We’re asking for Congress to revisit the statute because there are still adjustments to be made.”
Proposed changes include clarifying which people and jobs are covered by the restrictions, excluding people with misdemeanors and shortening Section 19 application-processing times.
There has been some movement in Congress. Senator Thom Tillis, R-N.C., and Democrat Joe Manchin of West Virginia introduced the Fair Hiring in Banking Act last year. The bill would replace a lifetime ban for those with disqualifying convictions with a seven-year waiting period in many cases. It would also make an exception for acts committed before age 21, and ensure that expunged records, pardons and sealed convictions are no longer a barrier to employment.
The restrictions are also coming under fire for the way they disproportionately affect minority groups. One out of three Black boys born today can expect to be sentenced to prison, compared with one of six Latino boys and one of 17 white boys, according to NAACP figures. Black people are incarcerated at more than five times the rate of White people.
“The burdens of having a criminal record have not fallen equally in our communities,” Jeffrey Korzenik, chief investment strategist at Fifth Third Bancorp, said in an interview. “So for those who have made a mistake in the past that are ready to rebuild their lives, unless you offer some kind of pathway, you’re pretty limited in the ability of your workforce to reflect the full diversity” of the local community, said Korzenik.
Wendy Weber, a senior staff attorney at Cabrini Green Legal Aid in Chicago, works closely with JPMorgan and local nonprofits to help applicants clear legal barriers. Since November 2019, she has screened close to 100 people as part of JPMorgan's program.
In Columbus, Ohio, the Legal Aid Society has referred 15 people with criminal records to work at JPMorgan in the past month, said Kathi Schear, a staff attorney with the nonprofit.
For the 15 years Schear has worked on the issue, her clients — mostly high school graduates or those working toward their equivalency degrees — were used to getting jobs as factory and warehouse workers or home-health aides. Working at a bank holds out the possibility of a career, instead of a job that simply pays the bills, Schear said.
The benefits of hiring people with criminal records extend beyond the impact on local communities. Ex-offenders willing to spend time and effort to train for demanding jobs tend to be highly motivated to change their lives, according to a report published by the U.S. Chamber of Commerce Foundation.
“You get people who are appreciative,” said Fifth Third’s Korzenik, who published a book about second-chance hiring and recently testified before a congressional subcommittee on the topic. Many are eager “to prove to themselves that they can do more, and are also very grateful for the opportunity to do so.”
