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Many employers currently use credit reports when they’re hiring or promoting employees, especially employees being considered for financial and top-level positions. Several late payments or too much debt could indicate irresponsibility or likelihood to extort money from the company, and could result in an applicant being turned down for the position.
In July this year, the Equal Employment for All Act was introduced in the House of Representatives by Congressman Steve Cohen (D-TN) and a group of 34 other Democrats. The bill proposes to stop employers from using credit checks to make "adverse employment decisions." The House Committee on Financial Services is currently reviewing the bill.
"Financial problems reflected on a negative financial report often stem from circumstances outside of the person’s control such as medical problems, illnesses, or layoffs," said Congressman Cohen in a press release. "It is unfair and makes no sense to further penalize those job seekers who want to work hard but have had financial difficulties by denying employment solely on the basis of their credit."
Congressman Luis V. Gutierrez (D-IL), one of the co-sponsors of the bill, is the chairman of the Subcommittee on Financial Institutions and Consumer Credit.
If passed, the law would amend the Fair Credit Reporting Act (FCRA), the Federal law that guides the updating and usage of credit reports. The FCRA currently allows employers to run credit checks, but requires them to get a signed written consent form from the applicant. If adverse action is made because of information in the consumer’s credit report, that person has the right to dispute the information and reapply for the position.
The new law would prohibit employers from checking credit reports, even if the employee signs a consent form.
There would be some exceptions with the new law, keeping it legal for employers to use credit reports in certain situations. Credit reports would continue to be used for positions that require national security or FDIC clearance, jobs with state and loan government agencies that already use credit reports, and certain positions at financial institutions. Credit reports may be used for employment purposes in other positions as required by law.
A number of civil rights groups have endorsed the new legislation including the National Consumer Law Center, National Employment Law Project, National H.I.R.E. Network, the Leadership Conference on Civil Rights and the NAACP.
So many people have taken serious credit hits over this latest economic mess. A lot of basically good people have been hurt. Why hurt them more by making them unemployable? I think this is a good idea. A company that is hiring people to handle large amounts of money will hire out a background check anyway.
I think it's a good idea but I think there should be exceptions for those that have to deal with large amounts of money.
With so many unemployed people out there and people depleting their savings, you will probably have a lot of hurt credit scores out there and people with a lot of debt.
I hope it passes. I'll be calling my "representatives" next week to voice my support.
What's next, make it illegal to discriminate against a blind guy who wants to drive a school bus? (And before anyone starts, I'm all for EEOC, but I also believe that reasonable has to mean just that.)
I don't believe that credit checks are neccessary for non-cash or high value merchandies (jewelry, certain high end electronics, etc.) handling positions, but if I were hiring someone to manage my electronics store, including making my bank deposits, I'd want to be able to check their credit and criminal histories.
What's next, make it illegal to discriminate against a blind guy who wants to drive a school bus? (And before anyone starts, I'm all for EEOC, but I also believe that reasonable has to mean just that.)
I don't believe that credit checks are neccessary for non-cash or high value merchandies (jewelry, certain high end electronics, etc.) handling positions, but if I were hiring someone to manage my electronics store, including making my bank deposits, I'd want to be able to check their credit and criminal histories.
Of course the credit check is not necessary for jobs not dealing with money.
What's next, make it illegal to discriminate against a blind guy who wants to drive a school bus? (And before anyone starts, I'm all for EEOC, but I also believe that reasonable has to mean just that.)
I don't believe that credit checks are neccessary for non-cash or high value merchandies (jewelry, certain high end electronics, etc.) handling positions, but if I were hiring someone to manage my electronics store, including making my bank deposits, I'd want to be able to check their credit and criminal histories.
And that's exactly why -- as included in the post above -- the proposed law DOES HAVE EXCEPTIONS:
Quote:
Originally Posted by diorgirl
There would be some exceptions with the new law, keeping it legal for employers to use credit reports in certain situations. Credit reports would continue to be used for positions that require national security or FDIC clearance, jobs with state and loan government agencies that already use credit reports, and certain positions at financial institutions. Credit reports may be used for employment purposes in other positions as required by law.
And that's exactly why -- as included in the post above -- the proposed law DOES HAVE EXCEPTIONS:
I don't see where retail jobs are an exception. It seems like the exceptions are mostly in banking and finance as well as jobs with security clearance.
I don't see where retail jobs are an exception. It seems like the exceptions are mostly in banking and finance as well as jobs with security clearance.
This is a summary of the provisions. The wording of the bill has not been finalized. I'm certain that the retail lobby will have their say before passage.
However, it's difficult to make a case for requiring credit checks for jobs that don't warrant bonding or criminal record checks. Certainly, if the latter indicate past offenses, that would be much more likely to be predictive of future untrustworthy behavior than a credit check which has no correlation to job performance.
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