Council Committee Passes Law to Ban Credit Reports to Prospective Employers

By ALVARO BLANCO

 A city-wide bill prohibiting employers from requesting credit reports from potential employees unanimously passed the City Council Committee on Civil Rights on Tuesday.

The full was expected to  vote on the measure Thursday and it was expected to pass.

“How can you pay your debts, if you can’t get a job,”said Councilwoman Deborah Rose  “The practice of using credit checks as part of the employment application process is pernicious. It often prevents people from disadvantaged backgrounds, who are more likely to have a bad credit, from getting a job.”

While 10 states and Chicago already have similar laws in place, they are ridden with loopholes and employers often find a way around them. New York City’s law would be the strongest thus far, with very narrow exceptions to credit checks, supporters said.

“All of them [10 states and Chicago] contain a series of some broad loopholes and exceptions,” said Councilman Brad Lander the bill’s main sponsor. “The bill that we are passing does have some narrower, much more thoughtful targeted exceptions, but it does not have these big broad loopholes.”

Some of these exceptions include any law enforcement officer, employees required to possess security clearance at any governmental level, positions with access to trade secrets, intelligence information or third party assets of $10,000 and digital security personnel.

Proponents of the bill say that this would prevent discrimination against New Yorkers who are able to work but have bad credit, usually due to unpaid hospital bills or student loans. They also argue that while employee credit checks have often been defended as cautionary against theft and fraud, but no report or study has ever found any correlation between credit and business fraud.

Councilwoman Rose said the bill would help students and graduates who are “coming out of school with unprecedented debt levels.”

The bill would take effect by the end of the year and subsequent studies on the bill’s success or failure would be done, committee members said.