The National Credit Union Administration (NCUA) has adopted a new progressive policy stating that credit unions can now hire people with past drug convictions. Marijuana Moment reports that the proposal to loosen employment restrictions was proposed in July 2019. The NCUA has issued a final interpretive ruling in the Federal Registrar.
Social Equity in the Financial Industry
The ruling notice stated that “while not discounting the public health implications of illegal drug use and possession, the Board continues to believe covered persons with single convictions or program entries for simple drug possession pose minimal risk to insured credit unions.” The notice adds that drug convictions have disproportionately affected minority communities.
The NCUA notice continued by saying that “there are already a host of significant extrajudicial consequences for individuals with nonviolent drug possession convictions, including not only employment bans but the loss of federal financial aid, eviction from public housing, disqualification from occupational licenses, loss of voting rights, and denial of public assistance.”
Among simple drug offenses, the Board listed other convictions that wouldn’t require an application being sent to the Board including small dollar simple theft, false identification, and isolated minor offenses committed by covered persons as young adults. The progressive policy will give opportunities to many job applicants that deserve a position in the financial industry.
Expanding Career Opportunities
Certain drug convictions are considered de minimus by the NCUA meaning that “the offenses are so minor and occurred so far in the past as to not currently present a substantial risk to the insured credit union.” The new ruling allows credit unions to hire people with drug convictions that don’t involve trafficking or manufacturing a controlled substance and it’s been at least five years since the conviction.
Before the final ruling was enacted, the NCUA reviewed comments submitted by the public. Some of the public comments focused on the injustice of employment exclusions due to past drug convictions. One comment even persuaded the agency to exempt most drug crimes that don’t qualify as de minimus.
The commenter argued that “drug offenses are not criminal offenses involving dishonesty or breach of trust.” After reading comments arguing for an expansion to the new regulations, the Board maintained that job applicants with drug convictions that aren’t de minimus must fill out an application, so that the Board can determine the “nature of the offense and elements of the crime.”
Credit Unions Support the Cannabis Industry
Despite the resounding approval of medical and recreational cannabis across many states, the federal government continues to classify marijuana as a Schedule I controlled substance with no medicinal value. As a result, banks have shied away from financing cannabis companies in fear of breaking the law.
Only a handful of credit unions have stepped up to the plate to offer cannabis companies a financial home. These select few financial institutions, however, can’t handle the high demand for banking options. Recently, however, the House of Representatives has passed a marijuana reform bill that would protect banks and credit unions that work with cannabis companies.
Hemp businesses, on the other hand, are free to work with banks and credit unions because hemp was legalized under the 2018 Farm Bill. The NCUA states that credit unions “may provide the customary range of financial services for business accounts, including loans, to lawfully operating hemp-related businesses within their fields of membership.”
As you can clearly see, credit unions have been supportive of the cannabis industry and are changing their rules so applicants with past drug convictions can get hired. The NCUA stands as a shining example to similar federal agencies looking to change their position on cannabis. Agencies like the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and the Drug Enforcement Administration (DEA) have also asked for public comments on issues such as hemp pesticides and cannabis research.
Hiring People With Past Drug Convictions
Many state regulations prevent convicted felons to work in the industry. Some states, however, are fighting back against the decades of overzealous criminal prosecutions for simple drug possession. For example, Illinois’ recreational cannabis law actually encourages businesses to hire a staff consisting of mostly drug convicted individuals in order to qualify for social equity provisions.
Illinois offers automatic expungement of arrest records for possession of less than 30 grams of cannabis. The law also allows individuals to petition the court for expungement in possession cases between 30 and 500 grams. The new and progressive laws aim to increase the participation of underrepresented individuals.
As more states and agencies continue to improve their hiring practices, more deserving people will get a chance to work in the cannabis industry and open up businesses with drug convicted individuals. The NCUA’s new ruling is a positive step toward leveling out the playing field and ensuring that all qualified applicants get a chance to shape the industry.
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