Senate Democrats Introduce Bill to Bar Employers from Using Credit Checks

December 17, 2013 | | Washington Post |

Hank Ronan knew he would get the job. He had sailed through three rounds of interviews and hit it off with the doctors at the diagnostic center in Annandale, Va., where he had applied to be a driver for $11 an hour.

Shuttling patients to appointments was a world away from his 20 years as a software engineer, but it was the best that Ronan could find after being laid off in 2011. He was eager to get back to work and granted the doctor’s office permission to run a credit check. Ronan never heard back, he said Tuesday in an interview. [...]

Ronan’s experience is at the heart of legislation introduced Tuesday by a group of Senate Democrats seeking to bar companies from using credit checks to weed out job applicants. Lawmakers say the practice contributes to long-term unemployment and disproportionately affects women and minorities whose credit was damaged during the financial crisis.

“No one should be denied the chance to compete for a job because of a credit report that bears no relationship to job performance,” Sen. Elizabeth Warren (D-Mass.), one of seven lawmakers sponsoring the Equal Employment for All Act, said during a call with reporters. “For millions of working families, a hard personal blow translates into a hard financial blow that will show up for years in a credit report.”

The bill, which exempts jobs that require a national security clearance, aims to stop employers from disqualifying would-be hires based on poor credit. In the face of stubbornly high unemployment, lawmakers say the continued use of credit reports could stymie economic growth. [...]

A study published in May by liberal think tank Demos found that credit checks were required in jobs such as telephone tech support and selling frozen yogurt. The think tank surveyed unemployed Americans and found that one in 10 had been told they would not be hired because of their credit. Poor credit was often associated with the lack of health insurance, medical debt or job loss.