FIL-3-2013: Modifications to the Statement of Policy for Section 19 of the Federal Deposit Insurance Act

Section 19 of the Federal Deposit Insurance (FDI) Act prohibits, without the prior written consent of the Federal Deposit Insurance Corporation (FDIC), a person convicted of a criminal offense involving dishonesty, breach of trust, money laundering, or who has entered into a pretrial diversion program, from participating in the affairs of an FDIC-insured institution. On December 11, 2012, the FDIC Board of Directors modified the de minimis exceptions regarding the potential fine and the number of days of imprisonment. Modifications of the criteria are expected to reduce the number of Section 19 applications and regulatory burden. The updated Statement of Policy (SOP) for Section 19 of the FDI Act is available on the FDIC's Web site and was published in the Federal Register on December 18, 2012. Further, the FDIC reminds the industry to become familiar with the requirements of Section 19 of the FDI Act and the related SOP, and to ensure that its personnel policies and procedures comply. All FDIC-insured institutions, bank holding companies, and savings and loan holding companies must comply with the requirements of Section 19 of the FDI Act (12 U.S.C. 1829).

Statement of Applicability to Institutions Under $1 Billion in Total Assets:  This guidance applies to all FDIC-insured depository institutions.