Sen.Warren, Rep. Cohen: It’s Time to Stop Employer Credit Checks

[cal04]

Sen. Elizabeth Warren and Rep. Steve Cohen / Credit.com
A person's credit history has no correlation with his or her ability to succeed in the workplace
Bad credit can happen for a lot of reasons, but today many people have bad credit through no fault of their own. Illness, job loss, divorce or the death of a loved one can plunge a family into unexpected hard times. In difficult circumstances like these, a drop in income or taking on more debt can badly damage a credit report—even for a person who continues to make every payment on time.

(snip)
Not only are credit reports poor indicators of job performance, but in many cases they aren’t even accurate. The Federal Trade Commission (FTC) reported in 2013 that as many as 1 in 5 consumers could identify at least one error in their credit reports. That’s compounded by the difficulty in correcting errors—not only are consumers often unaware an error exists in the first place, but credit reporting agencies can be frustratingly slow to respond when it comes to fixing those mistakes.

This means that one in five job-seekers could be rejected by an employer because their credit report lists a medical debt in default—even when they’ve paid off the debt in full and on time.

This is why we introduced the Equal Employment for All Act. It would help level the playing field for hardworking families who deserve a fair shake. Our legislation would prohibit employers from requiring prospective employees to disclose their credit history as part of the job application process, unless the position requires a national security clearance or a credit report is required under state or local law. It makes sure that hiring decisions are based on an individual’s skill and experience—not on past financial struggles. The bill also would stop discrimination against African Americans, Latinos and seniors who are more likely to be hit by bad credit.

http://time.com/money/4034052/stop-employer-credit-checks/?xid=soc_socialflow_twitter_money

Elizabeth Warren Points Out How Unfair This Hiring Practice Can Be
"We should call this what it is: discrimination."
http://www.huffingtonpost.com/entry/elizabeth-warren-credit-checks_55f82335e4b09ecde1d9a3eb?utm_hp_ref=politics

Sen. Elizabeth Warren (D-Mass.) and Rep. Steve Cohen (D-Tenn.) are calling for a ban on the ability of employers to check the credit history of their employees, saying that the practice is a form of discrimination unfairly targets people who have suffered as a result of the 2008 financial crisis.

[marmar]

1. Attention Democratic Party: Make an X-ray of Elizabeth Warren's spine......

....... and strengthen yours similarly.

[RiverLover]

2. LOL Love this!

Thank you! And thanks Elizabeth for having a spine!

[Ed Suspicious]

9. YES!

[JCMach1]

3. Step 1... Step 2, get rid of them entirely and make banks and creditors do DUE DILIGENCE

[Ed Suspicious]

10. That my auto insurance rates are based in part on my credit rating blows my mind.

Complete bullshit.

[pinebox]

22. Seriously?

Who the hell is your carrier? Mine sure aren't.

[Ed Suspicious]

23. American Family

[Gormy Cuss]

4. I had the displeasure to work with one of the Big Three on a special project using their data.

I needed a shower after each meeting. One first impression that never improved was that these companies don't care about data validity until laws require them to validate. Another impression was that they'd promise anything to sell their product.

That's why this doesn't surprise me at all:

But, as even a representative from the TransUnion credit bureau admitted, they “don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance.”

[BlueJazz]

5. Every time one of these good-intentioned bills come up the writers CONSISTENTLY forget one ...

...big thing that's happened in the internet age. Yep... Identity theft. It's gotten out of control and to check someone's past credit report is despicable. You might very well be checking someone else's misdeeds.

[MADem]

13. This is an important point. A person with sterling credit can have their life ruined by ID theft.

I know someone who changed their NAME because their credit and reputation had been so roundly destroyed.

Employment shouldn't have anything to do with credit rating. One really should not be associated with the other. Those sorts of intrusive background checks should be very limited to people handling large sums of money--accountants, for example, or bank tellers.

Will this bill move forward, or will it get buried in conference? I'm not too hopeful; I think the GOP and others LIKE having a reason to keep wages low....and "less desirables" who have a hard time paying their bills will be so desperate they will work for less--and that's the way those guys like it.


We'll see.

[avaistheone1]

6. Strongly agree

k&r

[WillyT]

7. HUGE K & R !!! - THANK YOU !!!

[Marrah_G]

8. Just another way to keep the poor from getting ahead.

[appalachiablue]

11. Get rid of credit checks for employment, housing, insurance, car rental and all. Scourge.

[BlueinOhio]

12. Insurance

Insurance companies should not be allowed to use credit scores also. House insurance is tied to my credit score and during the recesstion I managed to keep my house and now I am fighting to keep it now that it is almost paid off and my credit score tanked and it is another way to steal people's homes. The business near my house has burnt down 3 times in the past 15 years and they continue to have insurance because the owners have money and good credit. Also I have had a time getting auto insurance which is required by law for me to have so I can get to work.

[Atman]

14. Isn't it funny (not "ha ha") how Right To Work only applies if you're busting unions?

If you REALLY want to work but have an old debt hanging over your head, you apparently have no right to work.

[MrScorpio]

15. All in! nt

[lark]

16. i am one of those whose staff uses credit checks on a daily basis.

We do not, however, use them for employment screenings for the reason given above. I've also learned and shared with my staff not to let one "negative" report, slant the pickture, but to instead look at the trends before making a decision. The recent decision (by FTC?) to downgrade medical related debt was a good one.

[LittleGirl]

17. 'bout Time!

Yes, Good Grief YES!

Thank you!

[Curmudgeoness]

18. Another down side to using credit reports for employment.....

When I was out of work and on unemployment, and I was aggressively looking for work, my credit score kept dropping. I had an excellent score, and the drop was not permanent and it went right back up after I stopped looking.

I can only assume that the drop occurred because so many companies were doing checks on my credit, since I understand that it will lower your score to have too many checks. This can really affect people who are already at a place where their score is not high enough to weather a drop.

And the thing that pisses me off the most is that I never did get a job offer, so they were checking credit without even being serious about hiring me.

[Runningdawg]

19. After being turned down

for the same pt time, min wage job (night stocker at a grocery store) 5 times I wanted to know why a 50 year old woman with a 35 year work history and 2 college degrees couldn't catch a break. I should also point out I do NOT have bad credit, what we have is no credit history at all. We pay cash for everything. I thought that was commendable until.....
After the last attempt, I went to the company's HR office and asked why I was never called for an interview, here is the answer I got:
You cannot pass a credit check. If you are in debt you won't be able to keep your mind on your job and (my fav) poor people steal.
What a load of BS. Perhaps next they will demand access your medical records.
While we are on the subject, I always thought it was a joke until it happened to someone I know....He was called back for a 2nd interview with a company and they asked about his social media accounts. He told them he didn't have any. They didn't even bother to finish the interview or ask why, they just told him he wasn't qualified for the job (he was MORE than qualified) and showed him the door.

[Skittles]

20. I agree

the assumption is that anyone who has had financial difficulty is lazy, untrustworthy, not of sound character - it simply is not true. It is wrong to penalize people trying to work for a living.

[lonestarnot]

21. Yes it is and hurry up with something for indentured servants making student loan payments.