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Do Banks Run Background Checks?

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In looking for a job after release, a felon who has experience working in the banking industry may want to apply for a job at a bank. This blog post will cover whether or not banks run background checks.

  • What Is Included in a Background Check?
  • Bank Background Check on Job Applicants
  • FDIC Background Check Requirements
  • Do Banks Run Background Checks on Customers?
  • Can You Run a Background Check on Yourself?
  • Tips for Getting a Job at a Bank


What Is Included in a Background Check?

Employers, like a bank, review an applicant’s background because they don’t want someone who doesn’t succeed after starting a job. This is considered to be a “bad hire,” which is someone who:

  • Doesn’t produce quality work
  • Has a negative attitude
  • Doesn’t work well with other employees
  • Doesn’t deal well with customers
  • Doesn’t have the skills they stated on an application
  • Has attendance problems
  • Is dishonest on the job

The last question is the biggest challenge for felons. Their criminal history can be a problem when applying to a bank even if they are now committed to living an honest lifestyle.

An employer may view:

  • Credit reports
  • Driving records
  • Educational records
  • Criminal offenses

Background information helps an employer like a bank to determine a candidate’s:

  • Past mistakes
  • Character
  • Financial Fitness

This allows an employer to identify hiring risks for security and safety issues for the company.

The criminal record review conducted by a background check includes examining criminal history files for any criminal offenses, which will reveal all convictions and non-convictions, including cases not prosecuted or ones dismissed. Convictions can be reported with no time limit while a non-conviction will show up for seven years. A crime will not show up on a background check if a felon has his or her record expunged.

Banks Run Background Checks on Job Applicants?

Banks seek to hire dependable, trustworthy employees to prevent criminal behavior on the job which can be financially costly and create public relations difficulties. Typical positions available at a bank include:

  • Teller
  • Sales associate
  • Personal banker
  • Customer service representative
  • Call center representative

Yes, banks run background checks. In fact, financial service companies are stricter than almost any other in the private sector in completing a pre-employment background check. An applicant may be subject to screening for:

  • Criminal records
  • Credit check
  • Education
  • Work history verification
  • Drug test

Each financial institution has its own requirements. It is recommended to be honest in all information provided when applying for employment at a bank. Not being honest will be an automatic rejection and potential legal consequences for filing a fraudulent application.

Most financial firms do credit checks for those involved in revenue-generating activities or handling money. Many banks do pre-employment drug tests, although some do not. Many banks verify every detail on a resume, including dates of employment and GPA.

Employers in the financial services industry, including banks and credit unions, are subject to different background investigations and screening requirements.

Not every person applying for a job in a bank needs to be screened at the same level. A bank may screen a person at a higher level depending on the job level involved. A background check may not be as strict for an entry-level teller position.

Banks are prohibited from employing any person who has been convicted of a criminal offense involving:

  • Dishonesty
  • Breach of trust
  • Money crimes
  • Money laundering
  • Any criminal offense involving illegal manufacture, sale, or distribution of or trafficking in controlled substances

The Federal Deposit Insurance Act (FDIA) prohibits federally insured banks from hiring anyone with a history of:

  • Theft
  • Embezzlement
  • Money laundering
  • Dishonesty

Dishonesty means to:

  • Directly or indirectly cheat or defraud
  • Cheat or defraud for monetary gain or its equivalent
  • Wrongfully taking property belonging to another in violation of any criminal statute

Dishonesty also includes acts involving:

  • Lack of integrity
  • Lack of probity
  • A disposition to distort or cheat
  • Acting deceitfully or fraudulently

Breach of trust refers to a wrongful act, use, misappropriation, or omission with respect to any property or fund that has been committed to that person in an official capacity. This may include crimes that federal, state, or local laws define as dishonest.

FDIC Background Check Requirements

Almost all banks are federally insured through the Federal Deposit Insurance Commission (FDIC). The FDIC can give a waiver exception for certain minor offenses that happened more than 10 years ago.

Banking firms that sell and trade securities are excluded from hiring applicants with a felony criminal conviction or who have been convicted of misdemeanors that involve dishonesty. For minor drug arrests and DUIs, it will depend on the bank involved.

There is no comprehensive list of all crimes that prevent employment under the FDIC.

Banks are required to perform a reasonable inquiry regarding an applicant’s history to avoid hiring a person with a conviction that is covered under FDIC statutes.

The FDIC requires completion of a written employment application that includes a listing of all convictions and any diversion programs. A criminal background check is considered to be a reasonable inquiry.

To determine if an individual is qualified, a bank must conclude that person has not been convicted of, pleaded guilty, or no contest to a felony in a domestic or military court during the preceding seven years, or in the case of a felony at any time, involving:

  • Financial fraud
  • Dishonesty
  • Breach of trust
  • Money laundering

An individual must demonstrate financial responsibility, character, and general fitness which indicates that the individual will operate honestly, fairly, and efficiently.

A crime is considered to be a felony only if at the time of conviction it was classified as a felony under the law of the jurisdiction under which the individual was convicted.

Expunged convictions and pardons do not make an individual unqualified. In fact, having a criminal record expunged can be helpful to an applicant in applying for a bank position.

Do Banks Run Background Checks on Customers?

In applying for a bank account, which would allow someone to deposit and withdraw money along with applying for a loan for different financial purposes such as getting a vehicle loan or for a mortgage, certain information may be checked. The typical information requested to open a bank account includes:

  • Name
  • Date of birth
  • Address
  • Social Security Number
  • Primary Identification – Driver’s license, state-issued ID card
  • Secondary identification – Credit card, utility bill, rental agreement for current residence

The reason for requiring this type of information before opening an account is that it allows a bank to learn about someone’s financial past before opening an account. They conduct a bank history report, which is different from a credit report.

A bank history report shows if a previous account was, “closed for cause.” This report shows if there is a record of mishandling other bank accounts. If so, the bank could refuse to open a new account.

There are a few reasons a bank account may be closed for a cause:

  • Failure to pay insufficient funds fees after an overdraft
  • A history of writing bad checks
  • Committing fraud

Financial companies access bank history data through an account verification service.

Other items from a felon’s history might or might not be a problem. If someone has been convicted of a felony, it depends on the type of felony and the bank. For example, financial crimes (such as money laundering) can prevent a person from getting an account.

Can You Run a Background Check on Yourself?

Doing a background check on him or herself before applying at a bank will allow a felon to know exactly what will be discovered when the bank does its review. A felon with any questions can contact an attorney. It is essential to take action and not risk a chance on the results.

There are different kinds of personal background checks that a felon can run:

  • From the court in which he or she was charged
  • A credit report will help determine how financially responsible an individual is
  • Driving records for any job involving driving, such as a truck driver
  • An educational report through the National Student Clearing House

For someone wanting to do a background check on themselves, there are places that can help. A felon would have the best chance at getting a job at a bank by having his or her record expunged.

Tips for Getting a Job at a Bank

Suggestions for a felon to increase his or her chances to be hired at a bank are:

  • Arrive early for an interview
  • Dress appropriately
  • Make a positive first impression on the interviewers
  • Speak clearly
  • Make a case for a new job opportunity
  • Emphasize relevant experience and skills
  • Be ready to provide a job history with a current resume

Don’t hide the fact that you have a felony conviction if it comes up. Instead, explain the facts about that conviction without emotion.

It is never a good idea to lie about your past on an application. This could result in not being considered for a job if the bank finds out about it and could result in criminal prosecution for filing a fraudulent application. Highlight skills and abilities that qualify you for the job; focus on them during the interview.

Take responsibility for past actions and explain how you’re putting life in order. Doing your own background check allows you as a felon to know what an employer will see on your record.

Remember that you are not defined by your crime. Be willing to see yourself in a different light and ready to establish an honest life. The best opportunity for success in a new life begins with having support from family and friends. After all, felons do make good employees.

So what do you think about this blog post about whether or not banks run background checks? Have you or someone you know had a bank run a background check? What was that like and was he or she successful in being hired? Please tell us in the comments below. 

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