Bill to curb employer credit check passes N.Y. Assembly

June 28, 2013 | | Creditcard.com |

Afraid your bad credit may be holding you back from a great job?

That soon may not be a concern for job-hunting New Yorkers, as the Credit Privacy in Employment Act passed the New York Assembly on June 20. The act will largely ban employers from using credit reports to influence employment decisions. 

Jeffrey Dinowitz, a New York assemblyman and chair of the Consumer Affairs and Protections Committee, sponsored the bill, which now moves to the Senate, which ended its session this week. Under New York legislative rules,  the bill can be considered by the Sentate when it returns to session in January 2014. 

"Many people, who would otherwise do a good job, aren't being hired because of the false assumption that a bad credit history relates to how well they perform their job," Dinowitz said on a video posted to his website.

Currently, the Fair Credit Reporting Act makes it legal for employers to check an applicant's credit history. But nine states have laws limiting employers' use of checking credit reports when considering job applicants. Those states are California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington. Last year, 35 similar bills in 17 states were up for debate during their respective legislative sessions. According to the National Conference of State Legislature, some bills died in committee, while others, such as two Nebraska legislative bills, were "indefinitely postponed."

Amy Traub, a policy analyst at Demos, a consumer advocacy group, has studied the effects of employment credit checks on low- and middle-income households. Traub says the New York act is one of the strongest bills that would prohibit employers from using consumer credit reports when making hiring and promotion decisions. "Some state laws have exemptions for anyone who handles money," Traub says. "That's a lot of positions, including low-level positions like someone working in a coffee shop or retail clerk," she says.