Financial and Banking Industry

Financial institutions typically examine several key areas of a potential employee’s history. This includes identity verification and a criminal background check to flag any convictions, especially for financial crimes or fraud. Employers also commonly review the person’s credit history and financial records (like bankruptcies or large debts) to assess financial responsibility. Additionally, banks will verify past employment and education credentials, check for any required licenses or certifications, and may search civil records (such as lawsuits or foreclosures) that could be relevant to the role.

Applicants can be disqualified from working at a bank or credit union if their background reveals certain offenses. By law, anyone who has been convicted of a financial-related crime, money laundering, or any crime involving dishonesty or a breach of trust is typically barred from employment with federally insured banks.

These restrictions are outlined in federal banking regulations (FDIC and NCUA rules). Without a special waiver from the regulatory agency, a candidate with such a conviction cannot be hired in a role where they might affect the institution's affairs.

Even beyond legal disqualifiers, banks may also disqualify candidates for having poor credit histories or other red flags if those factors suggest unreliability or risk in handling money.

Most likely, yes. While there are no federal laws explicitly requiring banks to drug test, many major financial institutions have made drug screening a standard part of their hiring process. Banks see drug testing as another layer of protecting the business and customers from risk (employees under the influence could have impaired judgment).

Many banks are federal contractors subject to the Drug-Free Workplace Act, which effectively requires them to implement a drug-free workplace program (including employee drug testing) as a condition of their government contracts. So, although policies vary by company, job seekers in finance should expect pre-employment drug tests and possibly random tests during employment at larger institutions.

It's very common for financial industry background checks to include a review of an applicant's credit report and financial history. Employers in banking and finance want to gauge a candidate's financial responsibility and see if there are any serious issues like recent bankruptcies, unpaid debts, or patterns of financial mismanagement. Roles that involve handling money or sensitive financial information typically warrant a credit check as part of the screening.

This is in addition to the standard criminal and identity checks. A poor credit history won't automatically disqualify someone in all cases, but it can raise concerns for roles of trust. As with any background check element, employers must get the candidate's consent to pull their credit report and comply with FCRA guidelines when using that information.

Background checks are required by law for certain jobs in the financial industry. For example, federal regulations mandate background checks for positions at FDIC-insured banks and NCUA-insured credit unions to ensure candidates haven't been convicted of disqualifying crimes. Similarly, if you're registering as a financial advisor or broker with FINRA, a background check is part of the licensing process.

Outside of these specific cases, background checks might not be legally required for every financial job, but virtually all financial employers choose to conduct them. Given the high stakes of protecting client assets, sensitive data, and the institution's reputation, companies across banking and finance perform thorough pre-employment background screening as a best practice. It helps them comply with industry regulations and hire trustworthy staff.