Restricting the use of credit checks
Written by ESR News Blog Editor Thomas Ahearn
July 11, 2019 United States House Committee on Financial Services – which oversees the country’s housing and financial services sectors – adopted “HR 3614, Restriction on the Use of Credit Checks for Employment Decisions Act” which will prohibit the use of credit information for most employment decisions, except when required by law or for national security clearance, according to a press release from the Committee.
The invoice
– which was introduced by Representative Al Lawson (D-FL) – adopted by 32-26 and will prohibit employers from asking questions about the credit history of job applicants during job interviews or on job applications. The legislation is part of a increase of ten invoices which will reform the credit reporting industry introduced by Representative Maxine Waters (D-CA), who is chair of the committee.
A March 2013 report titled “Discredited: How Job Credit Checks Prevent Skilled Workers From Finding Jobs”‘found that one in four unemployed people participating in the survey said that a potential employer had asked to check their credit report as part of a job application. Among applicants with bad credit histories in the survey, one in seven were told they were not hired because of their credit history.
As of July 2019, eleven states – California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington – and the District of Columbia (DC) have passed laws that restrict the use of credit reports by employers for employment purposes. The cities of Chicago, New York and Philadelphia have also passed similar laws regarding employer credit checks.
Job Screening Resources® (ESR) offers employers a white paper entitled “States with laws regulating employment credit reports” to help them understand the restrictions on credit checks. ESR also provides credit checks that comply with federal, state and local restrictions on the use of credit reports by employers. To learn more, visit www.esrcheck.com/Background-Checks/Identity-Credit/.
NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind. All information on this website is for educational purposes only.
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