Federal Register Proposed New Rule on Employment at Credit Unions for Individuals with Drug Convictions

On December 2, 2019, the Federal Register presented Exceptions to Employment Restrictions Under Section 205(d) of the Federal Credit Union Act (“Section Chance IRPS”). The summary indicates that under Section 205(d), prohibits, except with the written consent of the Board, individuals who have been convicted of any criminal offense involving dishonesty or breach of trust from participating in credit union affairs.

The Board further indicates in the summary that it is rescinding current IRPS 08-01 and is issuing a revised and updated IRPS to reduce the regulatory burden.

In the section concerning convictions or program entries for simple misdemeanor drug possession, the Federal Register indicates that although it does not discount the public health implications of illegal drug abuse and possession, the Board believes that those with a single conviction or program entries for simple drug possession pose a minimal risk to insured credit unions. Further, these individuals face a “host of significant extrajudicial consequences,” including but not limited to employment bans, the loss of federal financial aid, public housing evictions, occupational license disqualifications, loss of voting rights, and the denial of public assistance.

The Board also indicates that it “recognizes” some of the uncertainty concerning marijuana related offenses given that several states have legalized the substance – but marijuana is still illegal under federal law.

The Board received comment letters, and it indicates that after careful review of the comments, it maintains that applications should be required for most drug offenses, and persons whose offenses are not classified as de minimis must submit an application.

All information is for general informational and educational purposes only. Nothing should be interpreted as legal or wellness advice.