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Elizabeth Warren Introduces Bill to End Credit Checks by Employers

All Voices

Sen. Elizabeth Warren (D-Mass.) introduced a bill yesterday that would ban employers from considering prospective employees' credit reports and ratings during the hiring process.

In an interview with MSNBC's Chris Hayes, she described these credit checks as "one more way in which the system is rigged."

Thus, the Equal Employment for All Act is based on solid research. For example, a 2012 poll by the Society for Human Resource Management discovered that approximately half of all employers used credit checks in the hiring process. Warren believes her bill will end the arbitrariness of hiring decisions, level the playing field, end the cynical nature of these checks, and bring about some “basic fairness” to an already nerve-racking process. [...]

Over 40 labor unions and worker-friendly organizations, including the National Employment Law Project, SEIU and Dēmos, have endorsed Warren's proposal.

Amy Traub of Dēmos writes that credit checks "illegitimately obstruct access to employment." Credit reports are notoriously inaccurate, and next to impossible to correct without paying a lawyer to help. Traub also notes that credit reports are of “particular concern for people with disabilities and victims of domestic abuse." She writes:

Domestic abuse, divorce, and medical bills are among the leading contributors to credit problems. In cases of domestic abuse, it is not uncommon for the abuser to purposely ruin a spouse’s credit as a way of controlling the spouse. Despite common sense and legal recognition that questions about marital status, medical conditions, and abuse ought to be out of bounds in the hiring process, many employers ask prospective employees to 'explain' any credit problems brought to light by a credit report. This forces job applicants to choose between discussing a recent divorce, confidential medical issues, and/or very personal details regarding the abusive dynamics in a relationship, or risk losing a job opportunity.