Lawmakers introduce legislation prohibiting employer credit history disclosure requirement

Elizabeth Warren

Elizabeth Warren

Sen. Elizabeth Warren (D-Mass.) and several other lawmakers introduced legislation on Tuesday that would prohibit employers from requiring employees to disclose credit history as part of the job application process.

The bill—the Equal Employment for All Act—was introduced in coordination with Sens. Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Patrick Leahy (D-Vt.), Edward Markey (D-Mass.), Jeanne Shaheen (D-N.H.) and Sheldon Whitehouse (D-R.I.).

“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns or other bad breaks than it is a reflection on an individual’s character or abilities,” Warren said.  “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills.”

While credit history has been used in the job application process to shed light onto a person’s character, Warren said research has shown that a person’s credit rating does not correlate with their ability to perform in the workplace.

Additionally, a study from the FTC earlier this year suggested that credit report errors are common and often hard to correct.

“It makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and that can be riddled with inaccuracies,” Warren said.

The bill has been endorsed by more than 40 groups, including the American Association of People with Disabilities, American Association for Affirmative Action, 9to5, Disability Rights Education and Defense Fund and the Center for Law and Social Policy.

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