Magazine article American Banker

A Labor Dept. Zinger on Job Bias: It Seeks to Tie Insurance to Hiring of Handicapped

Magazine article American Banker

A Labor Dept. Zinger on Job Bias: It Seeks to Tie Insurance to Hiring of Handicapped

Article excerpt

It Seeks to Tie Insurance to Hiring of Handicapped

Here's a frightening twist to the regulatory-burden debate: The Department of Labor says it can terminate deposit insurance at any bank or credit union that doesn't employ the handicapped.

The department has proposed an affirmative-action rule that describes deposit insurance and share insurance as contracts between the bank or credit union and the government.

Furthermore, its lawyers contend that the Americans with Disabilities Act gives the department the authority to void such contracts if an employer lacks an affirmative-action program.

This is exactly the same rule the department tried to adopt in 1980 and withdrew after complaints by banks and the Federal Deposit Insurance Corp.

Bankers thought the issue was dead.

Hard to Find

This time around, the FDIC and most of the industry didn't spot the rule - published in the Oct. 21 Federal Register - until this month, weeks after the official comment period had ended. The reason: The reference to deposit insurance is buried in one line in the middle of agonizingly plodding prose.

FDIC Chairman Andrew C. Hove wrote on Dec. 4, "We are deeply concerned by the Department of Labor's characterization of FDIC insurance as a government contract and the suggestion that the department may seek to terminate such insurance. We strongly urge the department to correct this misstatement."

The FDIC says deposit insurance is a license, not a contract. …

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