Published on:

Credit History Discrimination: Not Going Away

In March, we wrote about the use of credit checks by employers to discriminate against job applicants.

The good news: the city of Chicago has recently outlawed the practice. “Business groups” lobbied against the measure, according to the Chicago Tribune, but workers’ advocates won the city council over:

A union representative, an employment coordinator for a human rights group and a lawyer with the Illinois attorney general’s office all told the council’s Human Relations Committee that a troubled credit history has no relationship to poor job performance or theft on the job.

The officials also cited studies that indicate about a third of credit reports contain errors.

(Emphasis added.)

In Chicago, credit history is now a legally protected category in employment decisions.

The bad news: credit history discrimination is not going away any time soon. The New York Times tells the heartbreaking story of Alfred J. Carpenter, whose credit score is preventing him from working entirely: “‘There’s no reason,’ he said, ‘a strong, able guy like me should have to go on welfare.'”

Like millions of Americans, Carpenter’s life has been hobbled by medical debt incurred when he was without health insurance. Consumerist collected more stories like his, along with a glimmer of hope for top-down help: “There are legislators out there trying to wipe medical debt off credit reports entirely, including Senator Jeff Merkley of Oregon, who recently reintroduced the Medical Debt Responsibility Act of 2013.” Unfortunately, “a similar bill didn’t make it far before petering out.”

On a state-by-state level, legislation has more momentum: the Times reports that since 2010, seven states have enacted laws against checking credit history to vet job applicants; there are now nine such states total. New York City and New York State are both “considering strict new laws that would greatly limit an employer’s ability to do credit screening.”

The Times captured the harm that credit history discrimination causes to workers by quoting Chi Chi Wu, a lawyer at the National Consumer Law Center:

“Someone loses their job,” Ms. Wu said, “so they can’t pay their bills — and now they can’t get a job because they couldn’t pay their bills because they lost a job? It’s this Catch-22 that makes no sense.” It can also be a kind of backdoor job discrimination, Ms. Wu contends, given the numerous studies that demonstrate that those black, Latino or simply poor are more likely to have lower credit scores than those who are white and have means.

(Emphasis added.)

The Harman Firm supports continued legislation against this prejudicial practice. Contact us today if you have questions about discrimination in the workplace.

Contact Information