Persons Connected with Financial Institutions

Section § 4990

Explanation

If someone has been convicted of certain felonies, they can't work in management roles at financial institutions in California that have federally insured accounts, unless they were already employed or convicted before 1991. This rule applies to specific felony offenses related to financial misconduct outlined in state and federal laws, including those updated by the 1989 Financial Institutions Reform Act.

Since January 1, 1991, anyone applying for a management role or interested in owning a significant share of such a financial institution must allow access to their criminal history. The goal is to check for past relevant felony convictions or any theft-related crimes. This information must remain confidential and can only be used to decide if someone is eligible for the role or ownership stake.

Regulatory officials have additional power to collect background data on individuals beyond this law, ensuring broad authority to maintain the financial institution's integrity.

(a)CA Financial Code § 4990(a) Any person convicted of a felony violation of any of the provisions specified in subdivision (b) shall not serve in any capacity as a director or officer or in any other position involving any management duties with a financial institution in this state with accounts insured by an agency or instrumentality of the United States or a private share insurance or guaranty arrangement. This subdivision does not, however, apply to any director or officer of a financial institution, or to persons serving in managerial positions for financial institutions, whose office or employment with a financial institution commenced, and whose felony conviction occurred, prior to January 1, 1991.
(b)CA Financial Code § 4990(b) Subdivision (a) applies to felony convictions of offenses specified in Chapter 10 (commencing with Section 1320) of Division 1.1, Article 4 (commencing with Section 5300) of Chapter 1 of Division 2, Article 8 (commencing with Section 14750) of Chapter 4 of Division 5, and Chapter 6 (commencing with Section 18435) of Division 7. Subdivision (a) also applies to felony convictions of offenses specified in provisions of the laws of the United States added or amended by the federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Public Law 101-73).
(c)CA Financial Code § 4990(c) On and after January 1, 1991, any person who seeks employment by, or a controlling interest in, a financial institution specified in subdivision (a) shall, as a condition to obtaining that employment or controlling interest, permit the financial institution, its regulatory agency, or both to have access to that person’s state summary criminal history information, as defined in Section 11105 of the Penal Code, for purposes of determining whether the person has a prior conviction of a felony offense specified in subdivision (b) or any theft offense.
(d)CA Financial Code § 4990(d) Any state summary criminal history information obtained pursuant to this subdivision shall be kept confidential and no recipient under this subdivision shall disclose the contents other than for the purpose of determining eligibility for employment by, or acquisition of a controlling interest in, a financial institution specified in subdivision (a).
(e)CA Financial Code § 4990(e) The authority granted by this section to the commissioner and other regulatory agencies shall be in addition to any other authority granted by law to obtain information about the background of any person. Nothing in this section shall be construed to limit any authority of the commissioner or any regulatory agency otherwise provided by law.
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Section § 4991

Explanation

This law allows banks and financial institutions to share written employment references about a person’s involvement in crimes like theft or embezzlement, as long as those crimes have been reported to authorities. If they want legal protection, they must also send a copy of this reference to the person’s last known address when responding to another financial institution’s request.

The institutions won't be held legally responsible for giving a reference unless they knowingly and maliciously provide false information.

(a)CA Financial Code § 4991(a) In response to a request by another bank, savings association, credit union, or any other financial institution it is not unlawful for a bank, savings association, credit union, or any other financial institution to provide a written employment reference which advises of the applicants’ involvement in a theft, embezzlement, misappropriation, or other defalcation which has been reported to state or federal authorities pursuant to state or federal banking or financial institutions law. In order for the immunity provided in subdivision (b) to apply, a copy of the written employment reference shall be sent concurrently by the financial institution providing the reference, to the last known address of the person concerning whom the reference is provided.
(b)CA Financial Code § 4991(b) No bank, savings association, credit union, or any other financial institution shall be civilly liable for providing an employment reference as specified in subdivision (a), unless the information provided is false and the bank, savings association, credit union, or other financial institution providing the false information does so with knowledge and malice.
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