Pub. 7 2018 Issue 4

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 18 FDIC SECTION 19 AND THE ONE THAT GOT AWAY… By Dylan Serrault, KBA Staff Attorney/Compliance Review P ICTURE THIS, YOU’VE JUST RECEIVED A glowing application for a position. The applicant interviewed flawlessly and appeared perfect for the job and, even better, they can start immediately. What a relief it is to have a qualified employee take some of the workload off the bank’s shoulders. Well, that is until the FBI shows up at the bank a few months later looking for the new employee who has been laundering money for foreign drug cartels. How could this have been prevented? Well, for starters, investigating who the bank is employing. Not only is it a prudent practice, but it is required by the Federal Deposit Insurance Act. Section 19 of the Federal Deposit Insurance Act generally prohibits any individual convicted or that has received a pretrial diversion of a crime involving dishonesty or breach of trust or money laundering from being employed or affiliated with a bank. Furthermore, Section 19 requires a bank to make a reasonable inquiry regarding an applicant’s history to determine whether or not an employee falls within the scope of Section 19 prohibition. Sure, a bank could include a portion on their application for the applicant to complete regarding their previous convictions and investigate further to fulfill the requirements. However, honesty is not often a character trait used to describe criminals. From a small quiet town in Kansas to the sprawling metropolis of Kansas City, you can never be too sure who the bank is employing. In today’s environment, there are already far too many risks of financial loss stemming from outside the bank, don’t chance one of your employees being the one that got away with financial crimes in your bank; perform a background check to ensure your bank knows whom it is employing and ensuring compliance with Section 19. MEET LANE IAMS , YOUR FDIC SECTION 19 EMPLOYMENT ANALYST. Kansas-born and Washburn-educated, Lane is dedicated to leading community banks of the Midwest to more secure hiring practices. VISIT DISCOVER.CASTLEBRANCH.COM/SECTION19 OR CALL 888.723.4263 EXT. 7324 TO FIND OUT MORE ABOUT YOUR SECTION 19 REQUIREMENTS AND HOW LANE CAN HELP YOUR BANK TODAY ! © 2018 Castle Branch, Inc. All Rights Reserved. Lane D. Iams | lane.iams@castlebranch.com | 888.723.4263 ext. 7324 | 919.273.7963 (mobile)