Congressman Steve Cohen (TN-09) recently sent a letter to Richard Cordray -- Director of the Consumer Financial Protection Bureau (CFPB) -- urging him and the agency to observe how employers apply credit checks to hire or fire employees. Congressman Cohen's letter comes shortly after CFPB announced that the agency has adopted a rule to supervise the leading credit bureaus with more than $7 million in annual revenue. A copy of Congressman Cohen's letter is below:
July 18, 2012
Mr. Richard Cordray
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552
Dear Director Cordray,
I am writing to recommend the Consumer Financial Protection Bureau (CFPB) observe how employers apply credit checks to hire or fire employees. I applaud the CFPB's recent rule to supervise the leading credit bureaus with more than $7 million in annual revenue.
Credit reports have increasing importance in consumers' lives because they are used in many kinds of lending, by landlords in renting a property and even as a way to screen job applicants. That's why I introduced H.R. 321, the Equal Employment for All Act which would amend the Fair Credit Reporting Act to prohibit the use of consumer credit checks in relation to current and prospective employees for the purposes of making employment decisions. Too many Americans are caught in a cycle of debt. They have fallen into bad credit and as a result they cannot do what they need to do to climb out: find a job, work hard, pay their bills, and earn a better credit score.
The Equal Employment for All Act, would give some of our most vulnerable, "credit challenged" citizens (students, recent college graduates, low-income families, senior citizens, and minorities) the opportunity to begin rebuilding their credit history by obtaining a job. Far too often, employers turn down "credit challenged" applicants because they have erroneously linked credit scores to potential job performance. Even worse, the "credit challenged" have fallen victim to deceptive marketing practices by credit report companies or credit counseling services that charge outlandish fees that supposedly rehabilitate credit scores to help with employment.
A person's credit history has no bearing on their job performance. We should continue to do everything in our power to help people land jobs during these tough economic times and not hinder them. I urge the Consumer Financial Protection Bureau to examine employers' use of consumer credit checks in relation to current and prospective employees for the purposes of making employment decisions and hope the CFPB will work with me to eliminate this practice.
As always, I remain,
Member of Congress