Are there any laws that require us to do criminal background checks on all employees?

There is no law that I'm aware of that requires this. I'm sure a number of institutions do it. It's just not a requirement.

Quote:

---

There is no law that I'm aware of that requires this. I'm sure a number of institutions do it. It's just not a requirement.

---

I suppose that is technically correct. There is no law that says you have to conduct criminal background checks. But you probably should read the following FDIC FIL on the prohibition against hiring people with criminal convictions involving dishonesty or breach of trust.
Section 19

It applies to all FDIC insured institutions. You also should check with your bonding company. They may have something to say also. The penalties for violation of FDIC's Section 19 are pretty steep. Do you want to take the chance?

We are asked as part of our Information Security Program audit what our procedures are when hiring new employees. It is a risk under the information security program and is mitigated by checking references.

The information security standards, Part III (C)(1) require that your bank consider performing background checks. There is no specific requirement that you do it. Depending on the size of your institution and the extent to which all new hires are known to you, not doing a background check may be defensible. At some level of size and sophistication, it will not be.

It is not required, however it is a good practice that adds minimal time and costs. At least, review the list of those prohibited from the banking industry.

Retread,

Is a conviction for misdemeanor bookmaking considered a breach of trust or dishonesty? Also, if the conviction was expunged in the state of California, doesn't this mean that the FDIC cannot use the conviction against the person since it was dismissed and vacated? In closing, if needed; how would somebody go about getting a petition for Section 19? I look forward to your reply.

Instead of goint into a lengthy response, I just suggest you read FDIC's Statement of Policy found at

Section 19 Statement of Policy

Section B (1) answers your question on expungement. If you want to file an application for waiver, you have to contact your nearest FDIC Regional Office.

If the employee is going to handle securities of any kind, i.e. a trust department employee, then it is my understanding that background checks are required by the SEC.

Why would you NOT do a criminal background check? You are leaving yourself open to a negligent hiring lawsuit if you hire a sexual predator or similar behaviorally challenged person and if you hire someone convicted of a crime involving dishonesty or breach of trust, the Feds will be all over you. Banking is all about trust. It is also a best practice to do drug screening.