Everything you need to know about pre-employment background checks

Beecher Tuttle | E-Financial Careers

As you’d likely imagine, financial services firms are more stringent than nearly every other private industry when it comes to pre-employment screenings: criminal background checks, drug tests, education and work history verifications and even credit checks. Some red flags are career killers; others are more subject to interpretation if you’re honest and play the situation correctly.

Criminal background checks

In the financial world, the depth of criminal background checks depend on where you’re working. Small financial firms can be more subjective – federally-insured banks can’t.

Section 19 of the Federal Deposit Insurance Act (FDIA) prohibits federally-insured banks from hiring anyone with a history of theft, embezzlement, money laundering or dishonesty, says Chris Dyer, president and CEO of PeopleG2, an Anaheim Hills, Ca. based firm that specializes in pre-employment background screening.

Certain exceptions can be made, but it’s a difficult process. The Federal Deposit Insurance Commission (FDIC) can provide a waiver exception for certain minor offenses that occurred more than 10 years ago. Dyer recalled a case of a man who was granted a waiver after being busted for shoplifting decades earlier.

The mortgage industry is equally rigid. In addition to disqualifying individuals for crimes involving dishonesty, no one is allowed through the door if they have been convicted of a felony within the past seven years, according to the American Bar Association.  Firms that sell and trade securities are excluded from hiring applicants who have any felony criminal convictions or have been convicted of misdemeanors involving acts of dishonesty.

Now that’s not to say misdemeanors or crimes that occurred outside of the period in question won’t necessarily trip you up. It depends on the firm and how you position it.

“With petty drug arrests and DUIs, it really depends on the institution,” Dyer said. “The bigger the institution, the more objective they are likely to be. It can be black or white. Smaller firms are typically more subjective.”

If you’re not forthright about a conviction, your chances plummet, said Adam Zoia, CEO of Glocap, a Wall Street search firm. “When it comes to criminal matters the best approach for a candidate is to pre-disclose and explain such as a youthful DUI,” he said. “Although there is no guarantee that a prospective employer will proceed, it increases the odds to raise it proactively.”


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