Disclaimer
The policies and examples provided are general in nature and intended for informational purposes only. They do not constitute legal advice, create an attorney–client relationship, or represent a legal engagement. These materials reflect federal-level considerations and must be reviewed and tailored to an organization’s specific operations, workforce, and applicable state and local laws.
Organizations should engage qualified advisors to develop company- and jurisdiction-specific policies or employee handbooks.

1. Purpose and Scope

   1. 1.1 This Background Investigation and Suitability Policy (“Policy”) establishes the requirements, procedures, and standards for conducting background investigations and suitability determinations for all individuals subject to federal jurisdiction.

   2. 1.2 This Policy applies to all employees, contractors, subcontractors, consultants, volunteers, interns, and any other individuals requiring access to federal facilities, systems, information, or who perform work under federal jurisdiction.

2. Authority and Compliance

   1. 2.1 This Policy is established pursuant to and in compliance with applicable federal laws, regulations, and executive orders, including but not limited to:

      • Executive Order 13467, as amended

      • 5 CFR Parts 731, 732, and 736

      • Homeland Security Presidential Directive 12 (HSPD-12)

      • Federal Information Security Modernization Act (FISMA)

      • Intelligence Reform and Terrorism Prevention Act of 2004

   2. 2.2 All background investigations and suitability determinations shall be conducted in accordance with this Policy and all applicable federal requirements.

3. Risk Management

   1. 3.1 The Board of Directors, senior executive management, and designated staff must be aware of risks that arise from failure to comply with this adopted Policy and applicable federal regulations.

   2. 3.2 Failure to comply with this Policy or regulatory requirements may result in adverse regulatory ratings or, if made public, may result in severe market reaction and regulatory enforcement action.

   3. 3.3 The Board of Directors has evaluated various related risks including, but not limited to:

      • Strategic Risk: Failure to maintain accurate, complete, and satisfactory background investigation records may result in appropriate regulatory agencies delaying processing of applications and affect the institution’s ability to compete in the marketplace.

      • Compliance Risk: Legal and regulatory compliance, including compliance with the institution’s background investigation and suitability policy.

      • Reputation Risk: Ensuring marketplace confidence in the handling of background investigations, personally identifiable information (PII), and confidential information by protecting relevant data.

      • Operational Risk: Specifically cybersecurity risk, which includes preventing unauthorized access to improperly retained or destroyed background investigation records in cloud-based data or SaaS platforms.

4. Background Investigation Requirements

   1. 4.1 All individuals covered under this Policy shall be subject to background investigations commensurate with the risk and sensitivity level of their position or access requirements.

   2. 4.2 Background investigations shall include, at minimum:

      • Identity verification

      • Criminal history checks

      • Employment verification

      • Education verification

      • Reference checks

      • Credit history review (where applicable)

      • Citizenship/immigration status verification

      • Additional checks as required by position sensitivity

   3. 4.3 Position sensitivity levels shall be designated as Low Risk, Moderate Risk, High Risk, or Special Sensitive, with corresponding investigation depth requirements for each level.

5. Suitability Determinations

   1. 5.1 Suitability determinations shall be made based on the results of background investigations and shall consider:

      • Character and conduct

      • Integrity and trustworthiness

      • Reliability and judgment

      • Loyalty to the United States

      • Any other factors relevant to the individual’s ability to perform duties with efficiency and effectiveness

   2. 5.2 Unfavorable suitability determinations may be made based on:

      • Misconduct or negligence in employment

      • Criminal or dishonest conduct

      • Material, intentional false statements or deception

      • Alcohol or substance abuse

      • Financial irresponsibility

      • Other conduct indicating questionable judgment or trustworthiness

6. Records Management and Data Protection

   1. 6.1 All background investigation records shall be maintained in accordance with federal records retention requirements and applicable privacy laws.

   2. 6.2 Access to background investigation records shall be strictly limited to authorized personnel with a need-to-know.

   3. 6.3 All PII and sensitive information collected during background investigations shall be protected in accordance with federal privacy and security requirements.