When I rejoined the board of the National Credit Union Administration in 2019, one of my first acts as chairman was to advance regulatory reforms to offer credit unions more flexibility in extending hiring opportunities to applicants with past criminal records.
Those "second chance" reforms are among my proudest achievements at the NCUA. And in October, the board took
Under the new law and regulations, fewer Americans will be disqualified from consideration for employment based on past criminal offenses. Now I encourage credit unions to take up the challenge of putting these new hiring principles into action.
The initial purpose of the second chance reforms was to rethink some of the prohibitions that barred credit unions from employing people with criminal records. Our concern was that the existing prohibitions were overly rigid and punitive, since they didn't distinguish between minor and serious offenses, or consider the length of time since the offense had occurred. In cases where a potential recruit has sincerely accepted responsibility for a long-past mistake, shouldn't they have a chance at redemption? To me, that seemed a simple matter of justice and forgiveness, and consistent with the fundamental American belief that those who have repented for past missteps can start anew.
Given the particular sensitivity of financial sector employment, the NCUA's second chance reforms do retain certain restrictions. For instance, individuals who have a past record of financial crime or dishonesty, such as breach of trust, money laundering or identity theft, are barred from financial services employment. But for people with past nonviolent and lesser offenses, it makes sense to consider lowering the barriers to employment if they have paid their debt to society.
President Biden has directed government agencies to develop new rules on protecting privacy and security, preventing intellectual property theft, reducing bias and more in banks' use of artificial intelligence models.
Moreover, offering a fresh start to those who had paid that debt would have the potential of bringing new talent into the hiring pool. It's estimated that some 77 million Americans have an arrest or conviction record that might block them from employment opportunities; helping some of these people to rejoin the workforce would allow hiring managers to cast a wider net in recruiting, particularly in today's tight labor market. So, there was a clear business benefit.
In fact, more and more leaders in the larger business community are recognizing the wisdom of this approach. Notably, in 2021, leaders in various private-sector firms and prominent business organizations formed the
When it comes to implementing fair hiring principles into credit unions' recruiting approach, the NCUA board has not sought to prescribe any particular hiring practices for the industry. However, I do encourage credit unions to consider how they can incorporate second chance principles into their recruiting and hiring practices, in accordance with federal, state and local law.
For example, the
A core tenet of our national identity is the belief that America offers a place where individuals can make a fresh start. The second chance regulatory reforms are a step in the right direction to ensure more Americans have a chance to make a positive contribution to the credit union industry, to our economy and to our society — so I urge credit unions to consider how they can make the most of this opportunity to strengthen their institutions and communities through a commitment to fair hiring.
