CFP Board Proposes New Rules for Expunged Convictions
The CFP Board is seeking feedback on proposed revisions to how it evaluates applicants with expunged criminal convictions. The changes would amend the Board’s Fitness Standards, Procedural Rules and Sanction Guidelines, following the establishment of the Criminal Expungement Commission in March.
According to CFP Board Counsel Leo Rydzewski, there is currently no language in the Board’s Standards regarding how the Board’s Disciplinary and Ethics Commission should consider expungements, leaving it to the group’s judgment.
The revisions would clarify that the Board can (but does not have to) consider expungement a “mitigating” factor when assessing an application for CFP certification.
“The way criminal expungements are handled varies quite significantly from state to state. It’s definitely a patchwork of ways,” Rydzewski said. “In our organization, we have one set of standards, and we’ve given our commission discretion to decide when to mitigate.”
Particularly, the DEC will consider expungements “more heavily” if the court made positive findings about the applicant’s “rehabilitation, good moral character or low risk of recidivism.”
According to Rydzewski, the proposed changes’ biggest impact would pertain to applicants under a permanent ban, which could include felony convictions for, among other things, fraud, theft, embezzlement, perjury or identity theft (the full list is included in the Board’s Fitness Standards for potential applicants).
As of now, even if a criminal conviction has been expunged, that person’s application for CFP certification wouldn’t even reach the DEC for consideration. Under the proposed changes, the DEC will have leeway to consider the facts and circumstances, meaning individuals with criminal convictions expunged have the chance to be certified.
Rydzewski stressed that under the new rules, the DEC could, but does not have to, mitigate a decision due to an expungement, and also noted that many states don’t even allow expungement for some felonies, particularly violent ones.
The changes would also keep the CFP Board’s public-notice requirements, with the DEC applying its current standards to determine whether it would include the felony conviction in the CFP Board’s record, as well as in a press release the Board regularly publishes on public sanctions involving new or existing certificants.
In other words, the public could be notified of a certificant’s criminal conviction even if it had been expunged, with Rydzewski noting that most states have circumstances in which government agencies or others can be made aware, even if they’ve been purged.
“These types of policy judgments underlie our entire framework for upholding the ethics standard for CFP certification, he said. “We have to decide issues, for example, about what to do when somebody expresses remorse, when a CFP professional remediates misconduct, or if they, for example, seek to hide the misconduct from the CFP Board and from others. All of these issues require value judgments about the way they should be handled.”
The CFP Board is accepting public comments on the proposed changes through Aug. 21.
