Proposed bill banning credit checks on employees and applicants reintroduced

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Second verse, same as the first.

Back in March, I reported here that a bill introduced in the U.S. House of Representatives, known as the Equal Employment for All Act, would amend the Fair Credit Reporting Act to prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.

Yesterday, it was the Senate’s turn to get in on the act; the Equal Employment for All Act, that is.

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Details on the Senate bill, what it would mean for employers, and its chances of passage after the jump…

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The December 2013 version introduced in the Senate is basically the same as the House version from earlier this year.

In this press release, bill sponsor Sen. Elizabeth Warren (D-MA), noted that “research has shown that an individual’s credit rating has little to no correlation with his or her ability to be successful in the workplace.” A “fact sheet” released by her office further notes that “credit reports are not always accurate, and poor credit disproportionately targets women, minorities, and those already struggling financially.”

In 2009, the EEOC announced a lawsuit against in which it alleged that an employer unlawfully “rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions.”

However, earlier this year, a Maryland federal court dismissed that suit, concluding that the EEOC had failed to demonstrate that credit checks have a disparate impact on minorities.

Indeed, employers credit check only for positions for financial responsibility is paramount or those involving access to confidential information. A SHRM survey from last year indicated that poor credit history is not a barrier to hiring.

Best guess is that this bill does not pass. So, how about 23 minutes of Moby Dick (live)

Updated:
  • Hanan M. Isaacs

    Unless the prospective job involves access to funds, sensitive financial information of customers, or the like, a job prospect’s credit history should be made strictly off limits. Permitting employers to discriminate against job applicants on the basis of poor credit is public policy suicide. People with poor credit will never be able to improve their credit, let alone survive financially, if their credit history can and will be used against them. And taxpayers (as usual) will pay the bill for such foolishness.