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Bank Background Check: What to Expect

Finance is a growing industry and, as such, a great career option. Plus, higher education isn’t always a requirement for success – especially for entry and mid-level roles. That said, you’ll need to pass various bank background checks to get your foot in the door. Here are the ins and outs of what disqualifies you from working at a bank.

Why are Employee Background Checks Important for Financial Institutions?

Financial institutions are responsible for astronomical amounts of cash and personal identifying information. And in the wrong hands, somebody can use that information for nefarious purposes. And financial institutions can find themselves under federal scrutiny if it’s found out that they cut corners during the background check process. The average bank or credit union will run a general background check, arrest record check, credit check, and education check before making their final decision.

What to Look for in a Background Check for Financial Services

Bank background checks are in place to protect shareholders, members, and other employees. With that in mind, here are a few things that may immediately disqualify a candidate. 

Lack of Experience: A key factor for entry-level roles such as teller requires prior experience with cash handling. Even in an increasingly digital landscape, cash is still needed, and tellers have to add and subtract large sums at a moment’s notice. For higher-level positions such as banker, financial institutions often require industry experience or a degree to get started. Additionally, the average banker has to become a licensed loan officer. The license in question is called a Nationwide Multistate Licensing System number, or NMLS, and has to be verified before hiring, as do applicable degrees. 

Drug Tests: Some financial industry roles may include a drug test. Drug tests can be conducted with samples of hair, urine, blood, and saliva. Drug tests are used to find controlled substances, including marijuana. It’s worth noting that having a medical marijuana card isn’t guaranteed to exempt you from failing a drug test. 

Fraud: One of the most critical things bank background checks look for are signs of fraud. This is because financial industry workers are privy to personal information, including social security numbers, account numbers, passwords, etc. If a candidate is considered a perpetrator of identity theft, banks will disqualify them for any role, including entry-level positions. 

Theft: While fraud implies pretending to be someone or something you’re not, theft is more straightforward. Typically, theft charges appear in arrest background record checks as petty robbery, shoplifting, etc. Banks are one of the few industries that routinely have large amounts of cash on the premises. Ensuring that the workers responsible for said cash are trustworthy is paramount. 

Civil Court Check: Civil court checks show employers your history of lawsuits, convictions, nonpayments, child support, evictions, car accidents, and bankruptcies. Civil court bank background checks also display the date and location of the proceedings. This check helps an employer determine how you handle responsibilities and your finances. For example, a candidate with a history of evictions, bankruptcy, and nonpayment may be more likely to steal from financial institutions. 

Credit Checks: Credit checks are straightforward bank background checks that show credit scores and history. And similar to civil court checks, credit checks establish a candidate’s record of financial readiness and debt responsibility. This is important for banks as financial workers are one of the first resources for financial advice and will often answer questions about building credit, wealth, etc. A financial institution relies on its workers to provide accurate and legally sound advice.

FCRA & FDIC Compliance

Bank background checks adhere to the Fair Credit Reporting Act (FCRA) and the Federal Deposit Insurance Corporation. The FCRA was established in the 1970s and ensures that banks use accurate and fairly reported information before deciding to hire and extend credit. It also means that you have a right to know if your credit report was why you were denied a position. You also have a right to receive a copy of any and all credit information the bank received. 

FDIC insurance, established in the 1930s, is in place to insure account balances against theft and economic collapse up to $250,000. It’s worth noting that FDIC insurance only applies to banks. Credit Unions have National Credit Union Administration, also known as NCUA, which also protects for $250,000. And like any insurance, there are specific rules to remain insured. To maintain FDIC or NCUA compliance, financial institutions must take the necessary steps to protect their members, shareholders, and funds. One of those mandates includes bank background checks. 

How Far Back Does a Bank Background Check Go?

Wondering how far back does a bank background check go? The average background check contains seven years of history. That said, certain companies may look further into candidate history. Seven years is the minimum amount of time available. Anything expunged from your record won’t appear on a background check. 

Also, if your credit report has inaccurate information, such as reporting an open debt that you’ve long since paid off, then it’s time to file a credit bureau dispute. A credit bureau dispute removes inaccurate information from your report, but only after you contact the major credit bureaus. The process can take up to three months, so starting sooner rather than later is better. And rest assured, knowing that the average employer will allow you to explain any red flags in your credit or personal history.


Bank background checks can make or break a candidate’s hiring chances. But banks are looking specifically for fraud, theft, and financial instability. That means you may be in the clear if your background check brings back events unrelated to fraud, theft, etc. Financial institutions that partner with KarmaCheck get access to reliable information with an incredible turnaround time. If you’re a hiring manager, make your job easier by streamlining the background check process with KarmaCheck. Get started today.


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