Reentry Strategies: Collateral Consequences of a White Collar Conviction (ABA Criminal Justice Section)

A white collar conviction carries a second set of penalties that no judge announces at sentencing: license suspensions, industry bars, and disqualifications written into statutes and regulations that switch on by themselves once judgment is entered. These are called collateral consequences, and the ones that reach furthest in federal white collar cases are professional licensing, the banking and securities bars, benefit plan and health care exclusions, and federal contracting. The American Bar Association’s Criminal Justice Section built the national catalogue of them, and below is how the federal rules work.

Where these consequences are actually written down

The ABA Criminal Justice Section began work on the National Inventory of Collateral Consequences of Conviction in 2012, under a directive in the Court Security Improvement Act of 2007 (Pub. L. 110-177, section 510) telling the National Institute of Justice to collect and analyze the collateral consequences in every U.S. jurisdiction. It now lives inside the National Reentry Resource Center, funded by the Justice Department’s Bureau of Justice Assistance, and covers all 50 states, the federal system, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. A 2016 National Institute of Justice update described it as a database of more than 45,000 collateral consequences and civil disabilities.

You search it by jurisdiction, by consequence type (professional licensure, employment, government contracting, government benefits, housing, and others), and by keyword. Two limits matter: the site says its content tracks state legislative sessions and may not yet reflect a state’s most recent one, and it shows you the rule, not how a court has read it.

Professional licenses: what is automatic and what is discretionary

Most state boards apply a relatedness test. California is typical: a board “may suspend or revoke a license on the ground that the licensee has been convicted of a crime, if the crime is substantially related to the qualifications, functions, or duties of the business or profession for which the license was issued” (Cal. Bus. & Prof. Code 490). The fight is over relatedness.

Other bars are automatic, and federal. Under the SEC’s Rules of Practice, any attorney suspended or disbarred by a court, any person whose license as an accountant or other professional has been revoked or suspended in any state, and “any person who has been convicted of a felony or a misdemeanor involving moral turpitude shall be forthwith suspended from appearing or practicing before the Commission” (17 C.F.R. 201.102(e)(2)). It counts from entry of judgment, including on a nolo contendere plea, and whether or not an appeal is pending.

Insurance has its own federal statute. Under 18 U.S.C. 1033(e), an individual convicted of a criminal felony involving dishonesty or a breach of trust who then willfully engages or participates in the business of insurance affecting interstate commerce commits a new federal crime punishable by up to five years. The way back in is written consent from an insurance regulatory official authorized to regulate the insurer, specifically referring to that subsection.

Washington State Representative Tarra Simmons was told she could not sit for the bar because of her record, and won that fight. Her account is in her presentation to the group.

Working in banking after a conviction

Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. 1829, is the rule people mean when they say a conviction ends a banking career. Without prior written FDIC consent, a person convicted of “any criminal offense involving dishonesty or a breach of trust or money laundering,” or who agreed to enter a pretrial diversion program on such a charge, may not become or continue as an institution-affiliated party, own or control an insured depository institution, or “otherwise participate, directly or indirectly, in the conduct of the affairs” of one. The institution may not permit it either. A knowing violation carries a fine of up to $1,000,000 per day and up to five years in prison.

The Fair Hiring in Banking Act, enacted December 23, 2022, narrowed this considerably, and the FDIC’s conforming rule took effect October 1, 2024. Section 19 now does not apply at all to these categories, so no consent application is required:

Exclusion	The measure
Older offense	7 years or more since the offense occurred
Older offense, after incarceration	5 years or more since release from incarceration
Committed at age 21 or younger	More than 30 months since sentencing
Expunged, sealed, or dismissed	An order intended to destroy or seal the conviction from state, tribal, or federal record
De minimis offense	The FDIC’s criteria at 12 C.F.R. 303.227: no more than two covered offenses with all sentencing requirements completed, each punishable by three years or less of confinement and/or a fine of $3,500 or less, three days or less actually served, and none committed against an insured institution. Separate tracks cover bad checks with an aggregate face value of $2,000 or less and small-dollar simple theft of $1,225 or less
Designated lesser offenses	Fake ID, shoplifting, trespass, fare evasion, expired license or tag, plus other low-risk offenses the FDIC designates, after 1 year

Here is what catches white collar cases. Neither timing exclusion in section 1829(c)(1), the older-offense one or the age-21 one, applies to the offenses listed in section 1829(a)(2): 18 U.S.C. 215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1344, 1517, 1956, and 1957, plus mail or wire fraud that affects a financial institution, plus conspiracy to commit any of them. For those the FDIC “may not consent” for 10 years from the date the conviction becomes final, and the only opening in that decade is a motion by the FDIC asking the sentencing court to grant an exception in the interest of justice.

Opening a personal account is a separate fight from Section 19

Section 19 decides whether you can work in banking. Whether a bank will hold your money runs on different machinery, and for most people leaving a federal case keeping a personal account open is the problem that arrives first. Our Right to Banking initiative exists for that one.

Deposit account screening runs on consumer reporting more than on the judgment. A company compiling files nationwide on check writing history is a nationwide specialty consumer reporting agency under 15 U.S.C. 1681a(x), inside the Fair Credit Reporting Act, and 15 U.S.C. 1681j(a)(1) requires it to hand you your own file once in any 12-month period, free, on request.

Conviction information does not age out. 15 U.S.C. 1681c(a)(2) keeps arrest records off a consumer report once they antedate the report by more than seven years or until the governing statute of limitations has expired, whichever period is longer, and 1681c(a)(5) does the same for “any other adverse item of information,” but that paragraph carves out “records of convictions of crimes,” which carry no time limit. The limits also drop away under 1681c(b)(3) for employment at an annual salary of $75,000 or more, a threshold most white collar hiring clears.

Then there is the letter that closes an account and explains nothing. Sometimes the silence is required: under 31 U.S.C. 5318(g)(2)(A)(i), an institution that has reported a suspicious transaction may not notify any person involved in it that the report was made, or reveal anything that would reveal it. The staff on the phone may have nothing they are permitted to say.

Securities industry bars and how the appeal back in works

Under Section 3(a)(39) of the Securities Exchange Act, a statutory disqualification is triggered by certain misdemeanors and all felony convictions for a period of ten years from the date of conviction. Injunctions issued by a court involving securities or investment banking activity count regardless of age, as do expulsions or bars from a self-regulatory organization.

Disqualification is not automatically permanent. Once a member firm learns that an associated person has become subject to a disqualifying event, it has 10 days to amend that person’s Form U4 under Article V, Section 2(c) of the FINRA By-Laws. A sponsoring member can then file a Form MC-400 seeking approval for that person to associate, and a disqualified firm files an MC-400A. The application has to arrive with an interim plan of heightened supervision that complies with FINRA Rule 3110 and is tailored to the concerns behind the disqualification. If FINRA approves, it files a notice with the SEC under Exchange Act Rule 19h-1. The fee is $5,000.

Benefit plans, health care programs, and federal contracts

ERISA section 411, at 29 U.S.C. 1111, bars a person convicted of embezzlement, fraud, bribery, extortion, robbery, grand larceny, or related offenses, or of conspiring or attempting to commit them, from serving an employee benefit plan as administrator, fiduciary, officer, trustee, custodian, counsel, agent, employee, consultant, or adviser, or in any role with custody or control of plan assets. The period is thirteen years after the conviction or the end of imprisonment, whichever is later, unless the sentencing court, on the convicted person’s own motion, sets a lesser period of at least three years. Two other exits sit in the same sentence: the bar also ends early if citizenship rights revoked because of the conviction are fully restored, or if the sentencing judge on a federal offense, or the district court where a state or local offense was committed, determines after a noticed hearing that the person’s service would not be contrary to the purposes of the statute. Conviction runs from the date of the trial court’s judgment whether or not it is on appeal.

The HHS Office of Inspector General must exclude a person convicted of a program-related crime, patient abuse or neglect, a felony relating to health care fraud, or a felony relating to controlled substances, with a five-year minimum for each. Permissive exclusions carry a three-year benchmark and cover misdemeanor health care fraud and obstruction of an investigation, among others. Exclusion means no federal health care program payment for any item or service furnished, ordered, or prescribed by that person, which is why providers screen against the exclusion list before hiring.

Federal contracting exposure is discretionary. Under FAR 9.406-2, a suspending and debarring official “may debar” for a conviction or civil judgment for fraud connected to obtaining or performing a public contract, for antitrust violations relating to the submission of offers, and for embezzlement, theft, forgery, bribery, false statements, or tax evasion.

Four common assumptions are wrong:

• Social Security payments stop during confinement; the entitlement itself does not end. Under 42 U.S.C. 402(x), no monthly benefit is payable for a month falling inside a period of more than 30 days throughout all of which the person is confined pursuant to a conviction. The provision limits payment for those months rather than terminating the underlying entitlement.
• A white collar conviction does not cut off SNAP or TANF. The federal ban at 21 U.S.C. 862a reaches only felonies with possession, use, or distribution of a controlled substance as an element.
• Pell Grants reach confined students again, under the Department of Education rule for approved prison education programs that took effect July 1, 2023.
• Firearms turn on how the offense is classified. 18 U.S.C. 922(g)(1) makes possession unlawful after a conviction for a crime punishable by more than one year, but 18 U.S.C. 921(a)(20)(A) excludes from that definition offenses “pertaining to antitrust violations, unfair trade practices, restraints of trade, or other similar offenses relating to the regulation of business practices.”

Employment screening and the EEOC’s individualized assessment

Outside the regulated industries above, no federal statute bars a private employer from hiring someone with a conviction. What exists is a timing rule for part of the market and an enforcement framework aimed at all of it.

The timing rule came from the Fair Chance to Compete for Jobs Act of 2019 and took effect December 20, 2021. Under 5 U.S.C. 9202, an agency employee may not ask a civil service applicant to disclose criminal history record information before the appointing authority extends a conditional offer. 41 U.S.C. 4714 pushes the same rule onto federal contractors for positions related to work under the contract. The exception lists are narrow, and they are not identical. Section 9202(c)(1) exempts positions requiring an eligibility determination under clauses (i) through (iii) of 5 U.S.C. 9101(b)(1)(A), meaning access to classified information, assignment to or retention in sensitive national security duties, and acceptance or retention in the armed forces, plus positions as a Federal law enforcement officer and positions the Director of the Office of Personnel Management identifies by regulation. Section 4714 exempts contracts requiring access to classified information or sensitive law enforcement or national security duties, plus positions the Administrator of General Services identifies by regulation. Both step aside under 9202(b) and the parallel provision in 4714 where consideration before a conditional offer is otherwise required by law. Worth noting what is not on either list: clause (iv) of 9101(b)(1)(A) covers appointment to a position of public trust, and 9202(c)(1)(A) reaches only clauses (i) through (iii), so a public trust position is not exempt from the timing rule. Neither statute reaches private employers, which is where state and local ban the box laws come in.

The framework is EEOC Enforcement Guidance No. 915.002, issued April 25, 2012. It separates arrests from convictions, since an arrest does not establish that criminal conduct occurred, and runs on three factors from Green v. Missouri Pacific Railroad: the nature and gravity of the offense, the time that has passed, and the nature of the job held or sought. A screen applied without an individualized assessment, it warns, is more likely to violate Title VII.

Two limits there matter more to a white collar reader than the framework. Compliance with a conflicting federal law is a defense, which is precisely what Section 19, SEC Rule 102(e), 18 U.S.C. 1033 and ERISA section 411 are, while conflicting state and local rules are preempted by Title VII. And the guidance rests on disparate impact, a theory Executive Order 14281, signed April 23, 2025, directs every agency to deprioritize, naming 42 U.S.C. 2000e-2 and telling the Attorney General and the Chair of the EEOC to reassess pending matters relying on it. The guidance is still published. The enforcement posture behind it has changed.

The Sentencing Commission reports that 70.2 percent of the people sentenced for theft, property destruction and fraud offenses in fiscal year 2024 were men, which means close to three in ten of these cases belong to women coming home from federal custody. Where second-chance hiring is the policy, the federal disqualifications above still stand.

Housing: the mandatory bars, and a wide zone of discretion

Every admission denial federal law makes mandatory in federally assisted housing keys on drugs, alcohol, or sex offender registration. A fraud conviction triggers none of them.

Two are permanent. Under 42 U.S.C. 13663(a) an owner shall prohibit admission of any household that includes an individual subject to a lifetime registration requirement under a state sex offender registration program, carried into the regulations at 24 C.F.R. 960.204(a)(4) for public housing and 982.553(a)(2)(i) for vouchers. Under 24 C.F.R. 960.204(a)(3), and 982.553(a)(1)(ii)(C) on the voucher side, the agency must permanently prohibit admission where any household member has ever been convicted of drug-related criminal activity for the manufacture or production of methamphetamine on federally assisted premises.

One is time-limited. 42 U.S.C. 13661(a) makes a tenant evicted from federally assisted housing for drug-related criminal activity ineligible for three years from the date of eviction. Read the regulation before assuming the clock runs out on its own: 24 C.F.R. 960.204(a)(1) says the agency may admit the household inside those three years if it determines that the evicted member successfully completed a supervised drug rehabilitation program the agency approved, or that the circumstances leading to the eviction no longer exist. That is permission, not an automatic reset.

One more is mandatory and often missed. 42 U.S.C. 13661(b) requires agencies and owners to establish standards prohibiting admission of any household with a member the agency determines is illegally using a controlled substance, or where it has reasonable cause to believe a member’s illegal drug use or alcohol abuse may interfere with other residents’ health, safety, or peaceful enjoyment. The regulations carry it at 24 C.F.R. 960.204(a)(2) and (b). Rehabilitation is something the agency may weigh under 13661(b)(2), not something that ends the inquiry.

Everything past those is discretion, exercised locally. 42 U.S.C. 13661(c) lets an agency or owner deny an applicant whose household member engaged, during a reasonable time preceding selection, in drug-related or violent criminal activity or other criminal activity that would adversely affect the health, safety or peaceful enjoyment of other residents. 24 C.F.R. 982.553(a)(2)(ii) sets out the same permissive prohibitions on the voucher side. Each agency writes its own standards and decides what a reasonable time is.

Private landlords are a separate system with one federal hook. The Fair Housing Act’s discriminatory effects regulation at 24 C.F.R. 100.500 is what a blanket criminal record ban gets challenged under. HUD proposed on January 14, 2026 to remove those regulations and leave disparate impact liability to the courts, with comments closing February 13, 2026. The rule is still in force and the proposal has not been finalized.

A halfway house placement comes with a bed and an end date, so the housing search has to finish inside a window someone else set.

Voting, jury service, and what a pardon can and cannot clear

Three civil disabilities get grouped together and work nothing alike.

Voting rights are a state question, and the state that counts is the one where you register. No federal statute sets them. In Richardson v. Ramirez, 418 U.S. 24 (1974), the Supreme Court held that California could disenfranchise people convicted of felonies who had completed their sentences and paroles. Its reasoning was textual: section 2 of the Fourteenth Amendment exempts denial of the vote for “participation in rebellion, or other crime” from the reduced-representation penalty it imposes for other forms of disenfranchisement, and the Court read section 1 as unable to bar outright what section 2 had expressly spared from that lesser sanction. States have moved a long way since, which is why this is the consequence most often described wrongly by someone quoting a different state.

Jury service is the reverse, and it is federal. Under 28 U.S.C. 1865(b)(5), a person is not qualified for grand or petit jury service in a district court if he “has a charge pending against him for the commission of, or has been convicted in a State or Federal court of record of, a crime punishable by imprisonment for more than one year and his civil rights have not been restored.” Both halves do work: a pending charge disqualifies before any conviction exists, and the disqualification ends when civil rights are restored, which sends you back to state law.

Clearing the record is hardest, because federally there is almost nothing to clear it with. 18 U.S.C. 3607 is the criminal code’s only general expungement provision, and it reaches first-offense simple possession under 21 U.S.C. 844, with the order available only where the person was less than twenty-one at the time of the offense. Nothing comparable exists for fraud.

That leaves presidential clemency, and it does less than people assume. The Office of the Pardon Attorney puts it plainly: a pardon does not expunge, expungement is a judicial remedy the Department and the President cannot grant, and “both the federal conviction as well as the pardon would both appear on your record.” What it does do is facilitate removal of legal disabilities imposed because of the conviction. Under 28 C.F.R. 1.2, no petition should be filed until five years after release from confinement, or five years after conviction where no prison sentence was imposed, and generally none while the petitioner is on probation, parole or supervised release. Rachel Barkow counted the layers of review a petition crosses before it reaches a president in her presentation to our group, including the step where the office asks the prosecutor’s office that brought the case what it thinks.

Record sealing is a state remedy for state convictions. Closing the federal gap takes legislation, which is the point of the federal expungement effort.

Why this gets decided before the plea, not during reentry

Almost every rule above keys on the statute of conviction and the date, not the underlying conduct. Section 1829(a)(2) lists code sections. FINRA counts from the date of conviction. The OIG’s mandatory exclusions turn on whether the health care fraud offense was a felony. Which count survives a plea, and what it is called, can move a ten-year federal bar on or off the table.

The law on whether defense counsel must explain any of this is narrower than people assume. In Padilla v. Kentucky (2010), the Supreme Court held that counsel must inform a client whether a plea carries a risk of deportation. But it pointedly did not resolve whether the traditional line between direct and collateral consequences is the right one under Strickland. In the Court’s own words, “the question whether that distinction is appropriate need not be considered in this case because of the unique nature of deportation,” which it described as “intimately related to the criminal process” and so “uniquely difficult to classify as either a direct or a collateral consequence.” Padilla therefore establishes no duty to advise about licensing, banking, or securities disqualification. It leaves the question open.

Restitution and forfeiture run on their own track, covered in our presentation with David B. Smith, and Doug Passon covered building the sentencing case itself in his.

Where to look next

Start with the NICCC, filtered to your state and the category that matters to you, then open the statute it cites and check the date on the entry. On relief, former U.S. Pardon Attorney Margaret Love talked to the group about where it actually comes from now in her presentation, and Professor Mark Osler covered clemency in his. Our state-by-state pardon and expungement guidance and federal expungement advocacy page cover two very different paths.

For the parts of reentry no statute controls, see repairing search results after white collar legal trouble, international travel after a felony conviction, and how First Step Act earned time credits work. For how the custody, prerelease and supervision phases fit together, start with the stages of federal reentry.