Help End Credit Discrimination
Victory! Thanks to your help, New York City now has the strongest law in the nation to end credit checks for employment. Click here to see the full text of the law.
The use of credit reports to discriminate against job applicants is on the rise, with over 60% of employers nationwide using the credit histories of prospective employees to inform their hiring decisions.
Update: 10/6/2014: NYT Editorial Board: Bad Credit? Big Problem. A favorable credit report shouldn’t be a condition for employment. "New York could be a leader in reversing this unsavory trend."1
How does credit discrimination in employment happen?
This practice bars potentially-qualified New Yorkers from much needed jobs, and slows economic and job growth during a time of high unemployment
- Credit checks for hiring practices create a cruel Catch-22: individuals are unable to pay their bills due to unemployment and yet they are unable to find a job because of their poor credit
- Credit scores have no connection to job performance2
- As many as 25% of consumer credit scores contain serious errors3
- Low credit scores are often the result of uncontrollable events—such as medical expenses or identity theft—and are no fault of an individual
- The Equal Employment Opportunity Commission has recognized that the use of credit checks for employment decisions can lead to discrimination against people of color4
Pass the Stop Credit Discrimination in Employment Act
Council Members Brad Lander, Debi Rose, and 13 other Members have introduced the “Stop Credit Discrimination in Employment Act,” which would make the use of credit checks during hiring illegal in New York City.
1. A survey by the Society for Human Resources Management found that 60% of employers use credit checks for some or all job openings.
2. A study by Louisiana State University researchers found no connection between poor credit scores and bad behavior on the job.
Eric Rosenberg, a lobbyist for credit reporting company TransUnion, stated to the Oregon legislature that, “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”
3. A 2004 study by the National Association of State Public Interest Research Groups, "Mistakes Do Happen: A Look at Errors in Consumer Credit Reports," found that one in four credit reports contains serious errors, and 70% contain errors of some kind.
4. In 2010, the EEOC filed a lawsuit against Kaplan because the company "rejected job applicants based on their credit history. This practice has an unlawful discriminatory impact because of race and is neither job-related nor justified by business necessity"