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  1. #1
    Join Date
    Aug 2017
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    13

    Default FDIC Section 19 and Drug Conviction

    My question involves labor and employment law for the state of: New York

    Section 19 applies to drug crimes in which money laundering is an element. Whether a crime involving possession of drugs is covered by Section 19 will be determined by the nature of the crime as defined in the relevant criminal statute. All convictions for offenses concerning the illegal manufacture, sale, and distribution of or trafficking in controlled substances shall require an application, unless they fall within the provisions for de minimis offenses

    Can anyone explain this to me? Does drug possession of a small amount of marijuana for personal use mean I would have to fill out an application for a waiver? I dont understand what it means by the nature of the crime? Does that mean that if maybe there was a large amount it would be considered as intent to sell by fdic?

  2. #2
    Join Date
    Jan 2006
    Posts
    37,807

    Default Re: Fdic and Drug Conviction

    This is from the FDIC’s webpage


    Section 19 of the Federal Deposit Insurance Act (FDI Act), prohibits, except with the prior written consent of the FDIC, any person who has been convicted of any criminal offense involving dishonesty, breach of trust, or money laundering; or who has entered into a pretrial diversion or similar program in connection with such an offense, from becoming or continuing as an institution-affiliated party with respect to any insured depository institution; from owning or controlling, directly or indirectly, any insured depository institution; or from otherwise participating, directly or indirectly, in the conduct of the affairs of any insured depository institution.


    It applies to much more more than drug crimes.


    You appear astute enough to be able to read section 19 and derive a fair answer yourself. As I read it it wouldn’t apply to your situation.



    https://www.fdic.gov/regulations/law...1000-2100.html

    check out 1956. That appears to be the section you are speaking of. It doesn’t appear to fit as you’ve described your situation.

    https://www.fdic.gov/regulations/law...dic8000cla1956



    1957 could appply to large money value situations.

    https://www.fdic.gov/regulations/law...dic8000cla1957

  3. #3
    Join Date
    Oct 2014
    Posts
    6,851

    Default Re: Fdic and Drug Conviction

    Quote Quoting twink92
    View Post
    My question involves labor and employment law for the state of: New York

    Section 19 applies to drug crimes in which money laundering is an element. Whether a crime involving possession of drugs is covered by Section 19 will be determined by the nature of the crime as defined in the relevant criminal statute. All convictions for offenses concerning the illegal manufacture, sale, and distribution of or trafficking in controlled substances shall require an application, unless they fall within the provisions for de minimis offenses

    Can anyone explain this to me? Does drug possession of a small amount of marijuana for personal use mean I would have to fill out an application for a waiver? I dont understand what it means by the nature of the crime? Does that mean that if maybe there was a large amount it would be considered as intent to sell by fdic?
    I'm assuming that your first paragraph above was something that you copied from another site, but you did not indicate where you found it. A full explanation of the FDIC policy on applying Section 19 of the Federal Deposit Insurance Act (12 U.S.C. 1829) can be found in the link I provided.

    The key here is that the crime must have involved dishonesty, breach of trust, or money laundering. A criminal conviction that is only for possession of an illegal drug won't trigger the need to seek a waiver since there is no chance that the crime involved dishonesty, breach of trust, or laundering. But if the person is convicted of charges of selling, trafficking, manufacturing, or distributing drugs those persons may need to seek a waiver since those crimes often include elements of either dishonesty or money laundering.

  4. #4
    Join Date
    Aug 2017
    Posts
    13

    Default Re: Fdic and Drug Conviction

    Thank you, I got that excerpt from an attachment on the FDIC site. It seems to be the updated version of the link you have. They added a "money laundering" section

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