D.C. Bill Protects Job Applicants' Credit Histories

Washington, D.C., is the latest jurisdiction to consider legislation to prevent employers from conducting credit history screens for most job applicants.

Currently 11 states, New York City and Chicago have passed legislation limiting the use of credit checks in the hiring process. The states include California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington.

In November the D.C. Council Judiciary Committee unanimously passed The Fair Credit in Employment Amendment Act, which would amend the city's Human Rights Act of 1977 to include "credit information" as a protected trait.[...]

"These consumer protections are important, yet they are far from sufficient to prevent credit checks from becoming a barrier to employment," said Amy Traub, a senior policy analyst at Demos, a public-policy think tank based in New York City. "Employers can reject any job applicant who refuses a credit check."

McDuffie asserted that credit checks were never intended to be used in employment. Credit reports, which contain information on mortgage debt, student loans, credit card balances, past bankruptcies and debt collections, were instead developed as a means for lenders to evaluate whether a would-be borrower would be a good credit risk, he said, citing a report from Demos.

"Employment credit checks can create an untenable 'catch-22' for jobseekers—they are unable to secure a job because of damaged credit and unable to escape debt and improve their credit because they cannot find work," Traub said.[...]