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

Jane Summers



Federal Register 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. Specifically, the final IRPS rules will not require an application for convictions involving, among other things, “simple drug possession.”

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 marijuana is now legal in many states, but is illegal under federal law. The IRPS classifies such convictions or entries for drug offenses as de minimis, given that the person meets the following conditions: (1) they have no other drug conviction or program entry described under Section 205(d); (2) the single conviction or program entry for single possession of a controlled substance was a misdemeanor and was not for illegal distribution, intent to distribute, sale, trafficking, or manufacture of a controlled substance, or other related offense; and (3) five years have passed since the conviction or program entry (or 30 months for those 21 years or younger at the time of the conviction).

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.

Jane is a regular contributor who learned about the great benefits of CBD a few years ago after starting it herself. Impressed by its effects, she's interested in helping others learn about options that can be helpful for them.

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