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Can New York End Credit Discrimination in Employment?

Amy Traub

“I went through four interviews and everything went smoothly. I was on my way to the orientation program [for my new job] when I got a call on my cell phone: they had to cancel my orientation because there was a discrepancy in my credit report. . .”

I’ve written about employment credit checks in this space before, considering how personal credit reports -- originally developed as a tool for lenders to determine who is most likely to pay back a loan -- have never been proven accurate for employment purposes. Employment credit checks can have a racially discriminatory impact and may invade personal privacy, inadvertently revealing details about medical history and disability status that our laws are meant to protect. Finally, despite the frequency of errors in credit reports, the process of eliminating mistakes is labyrinthine.

But these dry facts only tell part of the story: the other side comes out in the stories of qualified people, like Gustavo Panezo, quoted above, who have been shut out of jobs they could perform admirably simply because of their credit. A series of video testimonials compiled by NEDAP puts a face and voice to the New Yorkers who were denied work because of their personal credit. Watch below:

Why New Yorkers specifically? While the problem of employment credit checks is national, New York City and State have each recently introduced legislation that would be the strongest in the country, outlawing the use of credit checks for employment purposes except as otherwise required by law.

Right now, New York City’s “Stop Credit Discrimination in Employment Act,” sponsored by Councilman Brad Lander, has particular momentum. The bill has a veto-proof majority of 34 co-sponsors and dozens of community organizations have signed on in support.

In an editorial this spring, the New York Times decried the existence of a “Credit History Underclass” and noted that “The interest around this issue shows that more lawmakers are starting to realize how this unfair practice damages the lives and job prospects of millions of people. The sooner they act to end it, the better.”