Congressman Steve Cohen (TN-09) today joined with the Congressional Black Caucus and the Congressional Progressive Caucus to host a Congressional Briefing entitled "Employment Credit Checks: Unwarranted Barrier to Employment." The briefing featured a diverse panel that discussed the adverse impact pre-employment credit screenings are having on minorities, women, and the unemployed, and the need for legislation to curb the use of such screenings by employers. Congressman Cohen is the author of legislation that would prohibit employers from using credit checks as part of the hiring process.
"Using a job applicant's credit history to deny employment is not fair because personal credit history is not an accurate predictor of job performance," said Congressman Cohen. "Memphis is in the bottom 10 cities in the nation when ranked by average credit scores, according to a 2012 survey by Experian, one of the nation's major consumer credit rating firms. Second chances in Hollywood and professional sports occur every day, but not for my constituents who are desperately looking for work. We should be doing everything in our power to help people find jobs during these tough economic times -- not hinder them."
The panel consisted of Ben Peck, Senior Legislative and Policy Associate, Demos; Tanya Clay House, Director of Public Policy, Lawyers Committee for Civil Rights Under Law; Sarah Crawford, Director of Workplace Fairness, National Partnership for Women and Families; Jose Garcia, Policy Fellow, National Council of La Raza; and Hilary Shelton, Director of Washington Bureau, NAACP.
Congressman Cohen authored the Equal Employment for All Act (H.R. 321) to prohibit employers from using credit checks as part of the hiring process unless the position sought involves national security, FDIC clearance or tremendous financial responsibility.
According to Society for Human Resource Management, the number of U.S. employers conducting pre-employment credit checks is on the rise, up from 36 percent to 43 percent. However, unless the job position involves significant financial responsibility, a perspective employee's credit score has not proven to be an accurate predictor of future job performance.
The Equal Employment Opportunity Commission (EEOC) has repeatedly acknowledged that the use of credit checks to screen out job applicants may disproportionately impact women and minorities, and therefore could be evidence of workplace bias.
This practice also poses a significant barrier to finding employment during tough economic times. More than one million Americans have lost their jobs and now are struggling to pay their bills on time. And they're caught in a vicious cycle: To pay down their debt they need a job, but they can't get hired because of their debt.
The Equal Employment for All Act would amend the Fair Credit Reporting Act to prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.
The legislation would provide several exceptions to permit a consumer credit report: (1) when the consumer applies for or currently holds employment that requires national security or FDIC clearance; (2) when the consumer applies for, or currently holds, employment with a state or local government agency which otherwise requires use of a consumer report; (3) when the consumer applies for, or currently holds, a supervisory, managerial, professional or executive position at a financial institution; (4) where otherwise required by law.