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New York Steps Closer to Stopping Credit Discrimination

Amy Traub

The steps of New York’s City Hall were crowded this morning. New Yorkers shut out of a job by employment credit checks spoke out and told their stories, expressing hope that New York City would build on its recent success banning discrimination against the unemployed in hiring to also put an end to credit discrimination.

After all, according to new research by the New York Public Interest Group (NYPIRG) and the Neighborhood Economic Development Advocacy Project (NEDAP) it isn’t New York’s small mom-and-pop businesses that insist on peering into a job applicant’s personal accounts, but the national and multinational companies – employers like Target and Home Depot – that already deal with restrictions on the use of employment credit checks in states like California, Illinois, Vermont, and Maryland. In the words of Deyanira Del Rio, Associate Director at NEDAP, “the main purchasers of employment credit reports are large corporations and chain stores, not the thousands of local small businesses that make up the economic lifeblood of New York City neighborhoods.”

Following the rally outside, workers and their supporters trooped inside for a hearing of the Civil Rights Committee on the Stop Credit Discrimination in Employment Act sponsored by Councilmember Brad Lander. and a veto-proof majority of 34 co-sponsors.

As expected, the Deputy Counsel for Mayor Michael Bloomberg objected to the bill, arguing that it failed to take into account the many reasons why credit history may be appropriate for a job. Faced with penetrating questions from Councilmember Lander, the Deputy Counsel could not provide evidence validating the use of credit information for any job category.

Alongside other members of the NYC Coalition to Stop Credit Checks in Employment, I had an opportunity to speak on the bill. I told Councilmembers about Demos’ recent research on employment credit checks:

We find that in our survey population employment credit checks are common and they are keeping people from getting jobs. Yet poor credit is associated with a host of factors that we don’t generally see as legitimate reasons to deny people employment: it’s associated with lack of health coverage, with medical debt, and with unemployment. We also find that people of color are disproportionately likely to report poor credit. And we see a high rate of errors in credit reports. . Employers may not realize this is what they are looking at on a credit report, but to a large extent, it is. [For the rest of my testimony, click here]

As I noted in a New York Daily News op-ed this morning co-written with Councilmember Dan Garodnick, a co-sponsor of the bill:

Employment credit checks harm job seekers and fail to provide meaningful information to employers. That’s why a growing number of states and cities are taking action to limit the use of credit checks in employment. It’s time for New York to join them. The City Council must pass the Stop Credit Discrimination in Employment Act and put an end to this unfair and discriminatory practice. 

ReNika Moore, speaking for the NAACP Legal Defense and Education Fund, pointed out that “If passed without exemptions or carve-outs, New York City workers would have the strongest, most effective protections in the country against credit discrimination.” Today’s hearing puts us on the road to doing it.