In the News

The federal judge overseeing Detroit's historic bankruptcy abruptly halted a trial Wednesday, ordering the city to renegotiate a proposed settlement with its creditors -- major banks owed hundreds of millions of dollars who are among the first in line to be repaid.

Credit checks aren’t just for loan officers anymore. Now, your prospective employer is checking your credit history too.

The practice is increasingly common as employers look for more ways to determine whether or not they’re about to hire the right employee.

But Massachusettes Sentaor Elizabeth Warren says it’s a practice that must end because credit history is biased and does not give an accurate picture of a person’s ability to do their job properly.

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People who end up with damaged credit — often through no fault of their own — can be shut out of jobs by employers who hold their credit histories against them.

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Despite being no more likely to fall behind on their credit card bills, African Americans are far more likely than white borrowers to be targeted by debt collectors.

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Decrying a “rigged” system and the long overhang of the 2008 crash, Sen. Elizabeth Warren Tuesday introduced a bill to ban mandatory pre-employment credit checks. “This act is about basic fairness,” the Massachusetts Democrat told reporters on a Tuesday call. “Let people compete for jobs on the merits, not whether they already have enough money to pay all their bills.”

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Salon
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A judge's ruling that the city of Detroit can move forward with bankruptcy and strip the city's public workers of their modest pension benefits will have a devastating impact on Detroit's middle class — many of whom are African-American — and the city's ability to rebuild a strong and sustainable economy.

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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. [...]

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Washington Post
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U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, introduced legislation on Tuesday that would prohibit employers from requiring job applicants to disclose their credit history.

In a conference call with reporters, Warren argued that a person's poor credit history is often the result of medical bills, job loss or divorce and does not reflect his ability to perform a job.

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new survey finds that African-Americans are much more likely than whites to be called by debt collectors, despite both groups reporting relatively equal levels of debt and repayment rates.

Just take a look at this chart:

debt collectors

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Job-hunters are increasingly being asked to agree to allow potential employers to view their personal credit information, a development that Sen. Elizabeth Warren says is unfairly keeping people out of the job market who've had financial setbacks or have reports that contain inaccurate information.