ALEXANDRIA, Va.–In an unusual discussion that had NCUA board members talking about forgiveness and redemption, the board has voted 3-0 in favor of loosening rules to allow more people with minor criminal transgressions in their past to be hired by credit unions.
A priority of NCUA Chairman Rodney Hood, the so-called “Second Chance IRPS”–officially known as Proposed Interpretive Rule and Policy Statement, Guidance Regarding Prohibitions Imposed by Section 205(d)– is expected to reduce the number of individual cases the NCUA board must review and approve before someone can be hired. No more will credit unions need to get a waiver before hiring someone who has bounced a check or had a simple drug possession charge on their record, for instance.
“The vast majority of (these) Americans are not violent criminals, but people who have perhaps made a mistake in their youths,” said Hood. “I have often heard forgiveness is less about changing the past and more about changing the future. This (proposal) today before us shows the value of forgivness and redemption. Many individuals who are going to be impacted have paid their debts to society. It is simply the right thing to do. And it could be a boon to credit unions in a tight labor market.”
NCUA staff told the board prior to the vote they do not anticipate there will be any increase in employee bond coverage costs as a result.
‘Takes Your Breath Away’
“I have faced a number of these presentations over the last few years and they all seem to take your breath away,” said NCUA Board Member J. Mark McWatters. “Someone has a youthful indiscretion and now they have turned their lives around, and 20 years away they are still haunted by something. It’s a financial death penalty on people. It’s redlining them away from working in the financial services area. Surely, the NCUA can balance our safety and soundness obligation with a sense of compassion that underlies this Second Chances (proposal) and look at people as who they are today, and where they are not constantly burdened by the shadow from their youth.”
Hood said after the 3-0 vote he looks forward to broadening efforts in the area, including looking at housing and access to mainstream economic activities.”
“Expect more to come from this agency when it comes to building a strong ecosystem for second chance individuals,” Hood said.