New bill would bar employers from requiring credit checks of potential hires

[Cebu_4_2]

New bill would bar employers from requiring credit checks of potential hires
Published time: December 18, 2013 23:12 Get short URL (http://rt.com/usa/credit-check-employers-applicants-459/)

http://cdn.rt.com/files/news/21/8f/30/00/20.si.jpg Senator Elizabeth Warren.(Reuters / Joshua Roberts)

Employers would no longer have the right to attain a prospective employee’s credit report, or to deny a job applicant based on credit status, under a bill introduced Tuesday in the US Senate.

Sen. Elizabeth Warren (D-MA) and six other senators proposed the Equal Employment for All Act, which would aim to end the ability of employers to run credit checks on possible employees, currently a common practice.

Advocates of the measure says employer credit checks are a high, needless barrier of entry into the labor market for many with poor scores. Supporters add that the employer checks contribute to long-term unemployment and have disproportionately impacted women, minorities, students and seniors.

"There's little or no evidence of any correlation between job performance and a credit [report]," Warren said Tuesday, according to CNN. "[T]his is a point of basic fairness...people who get hit with hard economic blows end up getting squeezed out of the system. This is another way the game is rigged against hardworking middle-class families."

The think-tank Demos found in a report this year that one in ten unemployed Americans were denied a job based on credit status. Demos said the report evaluations target anywhere from entry-level positions to senior management staff.

Whether employer checks are legal or not, a study by the Federal Trade Commission released in February showed errors in credit reports are common. The FTC revealed that one in five consumers has an error on their credit report.

Employers are allowed to check credit history under the Fair Credit Reporting Act, which requires the prospective employee’s consent. A 2012 survey by the Society for Human Resource Management found that 47 percent of employers use credit checks when considering hires.

“A credit check can serve an important function in certain jobs, especially in the financial services industry,” said Elizabeth Milito, senior executive counsel at the National Federation of Independent Business, according to The Washington Post. “A blanket prohibition would disadvantage many businesses that use credit as one component of a background check.”
The bill allows an exemption for positions in the government that require a national security clearance.
Over 50 advocacy groups signed a letter Tuesday in support of the legislation.

"Discriminatory credit checks are bad for employers, they're bad for job seekers, and they're bad for our economy. In order to have an inclusive recovery where all Americans have a chance to take part, Congress must pass the Equal Employment for All Act," said Nancy Zirkin, executive vice president of The Leadership Conference on Civil and Human Rights.

The bill has no Republican support in the Senate, The Washington Post reported.

A similar measure was proposed in the House in 2011, though the legislation did not make it past the committee level.
In the past three years, 10 US states have barred employers from demanding credit checks for job applicants.

[midnight rambler]

What about prohibiting conducting criminal background checks - is that next? (of course, the goal is to make all the rubes criminals)

[Cebu_4_2]

Probably close to 1/3 of the country is on food stamps, have been foreclosed on, have student loans all of which they can't pay because of no jobs... Why is this lady trying to help?

[madfranks]

Elizabeth Warren is a true freedom fighter and defender of liberty.

/sarc

That bitch despises the very thought that people should be free to act as they please. She abhors the idea that individuals should be free to voluntarily interact with each other without her oversight and her control.

[Cebu_4_2]

Elizabeth Warren is a true freedom fighter and defender of liberty.

/sarc

That bitch despises the very thought that people should be free to act as they please. She abhors the idea that individuals should be free to voluntarily interact with each other without her oversight and her control.

I follow that, so what's the angle? I mean really they have this demise going full tilt for amerika... I just haven't caught it yet with her.

[BrewTech]

“A credit check can serve an important function in certain jobs, especially in the financial services industry,” said Elizabeth Milito, senior executive counsel at the National Federation of Independent Business

I suppose it would; a bad credit score could mean you lack proper faith in the religion of debt slavery...

I'm surprised I haven't seen much discussion about how a person's character or ability to work is directly related to their ability to cheerfully be a debt slave.

I do a great job, and I haven't been in debt in over 5 years. My credit score doesn't exist... I guess for a corporate job, with a credit check, I wouldn't get hired.

I guess they would preach to me that I "lack faith in the system", and therefore can't be trusted.

[madfranks]

I'm surprised I haven't seen much discussion about how a person's character or ability to work is directly related to their ability to cheerfully be a debt slave.

I do a great job, and I haven't been in debt in over 5 years. My credit score doesn't exist... I guess for a corporate job, with a credit check, I wouldn't get hired.

I guess they would preach to me that I "lack faith in the system", and therefore can't be trusted.

I think you're missing the point. I don't know whether or not a credit check provides any information that would determine whether someone was a good or bad choice to hire, but they should be free to request that information, just as you or I should be free to decline to provide it. Legislating that it must all be this way or that is tyrannical.

[mick silver]

it one way to see a person before you hire them to work in store around cash

[Hitch]

I think you're missing the point. I don't know whether or not a credit check provides any information that would determine whether someone was a good or bad choice to hire, but they should be free to request that information, just as you or I should be free to decline to provide it. Legislating that it must all be this way or that is tyrannical.

Exactly, it should be up to the employer to decide whether or not a credit check should be required for employment.

Some careers and vocations need certain checks to filter out people who may not be suitable due to the nature of the work. Take a fire dept, for example. Psych exam, to make sure a candidate is mentally sound, to handle the stress of fighting fires and seeing gruesome injuries. Background checks, to make sure they are ethical, firemen go into people's homes, the public trusts them. Lie detector tests, again ethics, and to ensure the applicant is not lying on past information. Drug testing, to ensure the applicant doesn't have any dependancies, can function if they show up to work drunk or high on drugs, innocent people can die. Driving history, if a person sucks at driving a car, how could they drive a big fire engine racing code 3 to an emergency.

It's a free market, it should be up to the employer to dictate the terms of hire.

[BrewTech]

I think you're missing the point. I don't know whether or not a credit check provides any information that would determine whether someone was a good or bad choice to hire, but they should be free to request that information, just as you or I should be free to decline to provide it. Legislating that it must all be this way or that is tyrannical.

No, I got that point. Just trying to add some dimension to the discussion.

[BrewTech]

It's a free market, it should be up to the employer to dictate the terms of hire.

While I agree with the second part of that statement, I have to take issue with the first. If the market were truly "free enterprise", the term "credit score" couldn't make or break people's opportunities in life, nor would it be the measure of a person's character to the extent it is now.

[Libertytree]

A crappy credit score does not mean you're not an honest person with no integrity. To equate one with the other is absurd! That's why there's such a thing as references!

[madfranks]

No, I got that point. Just trying to add some dimension to the discussion.

Ah, well my apologies. While I tend to agree that a credit score is not a good indicator of what kind of person you may be, I'm not naive enough to believe that just because I don't think it's necessary that it in fact would never be necessary for someone else. Some jobs in financial fields might have a keen interest in the financial abilities of their employees.

[Libertytree]

Ah, well my apologies. While I tend to agree that a credit score is not a good indicator of what kind of person you may be, I'm not naive enough to believe that just because I don't think it's necessary that it in fact would never be necessary for someone else. Some jobs in financial fields might have a keen interest in the financial abilities of their employees.

You mean like the .gov hires proven tax swindlers and crooks? Meanwhile the average person gets scrutinized for having bad luck with no crime commited?

[Hitch]

While I agree with the second part of that statement, I have to take issue with the first. If the market were truly "free enterprise", the term "credit score" couldn't make or break people's opportunities in life, nor would it be the measure of a person's character to the extent it is now.

I see your point, however couldn't an extremely bad credit score suggest a person is struggling financially? If so, a person in that position "might" be more tempted to take bribes, or skim off the top, etc. Say a cop for example, or brinks security guy transporting money.

[horseshoe3]

I see your point, however couldn't an extremely bad credit score suggest a person is struggling financially? If so, a person in that position "might" be more tempted to take bribes, or skim off the top, etc. Say a cop for example, or brinks security guy transporting money.

Or you could look at it the other way and say that a congressman who makes 150K and somehow amasses millions in one term of office is probably taking bribes. I bet he has a pretty good credit score too - so he must be honest.

[madfranks]

You mean like the .gov hires proven tax swindlers and crooks? Meanwhile the average person gets scrutinized for having bad luck with no crime commited?

It's possible (actually quite probable) that many people with really bad credit scores have them because they're irresponsible and don't know how to manage money.

[Libertytree]

It's possible (actually quite probable) that many people with really bad credit scores have them because they're irresponsible and don't know how to manage money.

How does being bad at ones personal finances indicate that they will or will not be thieves? If they are thieves and that is proven either through an arrest or fired from previous job for stealing that's one thing. It's an assumption, an arbitrary guess at best.

[Cebu_4_2]

It's possible (actually quite probable) that many people with really bad credit scores have them because they're irresponsible and don't know how to manage money.

I have real bad credit and can manage money great, just a lack of it. Besides the ones I got fucked by everything else is paid for.

[Hitch]

I have real bad credit and can manage money great, just a lack of it. Besides the ones I got fucked by everything else is paid for.

That's the irony of the credit system. Sometimes a person has bad credit because they were great with money, and beat the system. A buddy of mine financed a house for over 300K, when the bubble burst in 07/08, it's worth went down to 125K. He gave the keys back to the bank and let them have it. His credit looked horrible for awhile, but financially that was a great decision to make.

[madfranks]

How does being bad at ones personal finances indicate that they will or will not be thieves? If they are thieves and that is proven either through an arrest or fired from previous job for stealing that's one thing. It's an assumption, an arbitrary guess at best.

I have a buddy who is one of the most irresponsible people I know. He borrowed tons of money while in college, never graduated, and is still living on borrowed money. After losing a job, on unemployment he didn't even look for a job, preferring to max out all the "benefits" while taking motorcycle trips across the country. He's defaulted on many credit cards and his credit score sucks. He's not a thief, but he is very irresponsible and his credit score is indicative of that. If you were an employer and saw that his credit score was so low, wouldn't you want to know why? Was it bad luck, or was it irresponsible living?

[Santa]

Steal $100 and become a convict. Steal $100,000,000 and become a diplomat.

[Libertytree]

I have a buddy who is one of the most irresponsible people I know. He borrowed tons of money while in college, never graduated, and is still living on borrowed money. After losing a job, on unemployment he didn't even look for a job, preferring to max out all the "benefits" while taking motorcycle trips across the country. He's defaulted on many credit cards and his credit score sucks. He's not a thief, but he is very irresponsible and his credit score is indicative of that. If you were an employer and saw that his credit score was so low, wouldn't you want to know why? Was it bad luck, or was it irresponsible living?

As an employer I might wonder and even ask but alas the truth and the lie is impossible to discern from each other, it's subjective. There's no way to know for sure so an employer takes a chance on each and every hire, regardless of credit score. How many supposed perfect employees wind up enbezzling or killing somebody?

[mick silver]

he would not work for us in our store that why we run a credit check on anyone we hire . everyone we know that has cash coming into there biz also does a credit check on the ones they hire .... you cannot be bonded if not . cash turns some people into a thief



I have a buddy who is one of the most irresponsible people I know. He borrowed tons of money while in college, never graduated, and is still living on borrowed money. After losing a job, on unemployment he didn't even look for a job, preferring to max out all the "benefits" while taking motorcycle trips across the country. He's defaulted on many credit cards and his credit score sucks. He's not a thief, but he is very irresponsible and his credit score is indicative of that. If you were an employer and saw that his credit score was so low, wouldn't you want to know why? Was it bad luck, or was it irresponsible living?

[EE_]

In most businesses, I would require a credit check.

It's very easy to hire people...if you've make a mistake it can be very difficult to get rid of an employee. Anything you can have in your favor to know more about a prospective employee.

Having a low score doesn't always mean someone can't manage their life/finances. If you are any judge of character, you may be able to read them explaining why their score is low. Some of their info may be verifiable.

If a person stayed out of debt and paid cash all their life...has a low score, they can be a better employee then the person with a high rating.

[BrewTech]

The debt-based "money" system is criminal by nature, as it is privately owned by proven thieves and psychopaths.

Since there isn't actually any real money in the system, only debt, honest people are forced to interact financially in a crooked system.

I would posit that often times it's difficult for people to "act responsibly" in a system that is contrary to their very nature. Given an honest money system where debt is not essentially mandatory, but instead discouraged, perhaps these "financially irresponsible" folks would do just fine?

[BrewTech]

In most businesses, I would require a credit check.

It's very easy to hire people...if you've make a mistake it can be very difficult to get rid of an employee. Anything you can have in your favor to know more about a prospective employee.

Having a low score doesn't always mean someone can't manage their life/finances. If you are any judge of character, you may be able to read them explaining why their score is low. Some of their info may be verifiable.

If a person stayed out of debt and paid cash all their life...has a low score, they can be a better employee then the person with a high rating.

A credit union I was in a few years ago does a credit check before opening an account for someone. When they ran my credit, the report spewed out a 4 digit number (1551, or something)... the lady actually had to go ask someone what it meant, as she hadn't seen it. She came back and told me it was because I have an extensive credit history, but had no active accounts for so long after paying them all off that my credit literally went off the scale. She informed me that it wasn't a good thing, as it was much the same as having no credit history.

CU Lady: You really should get a credit card and start rebuilding your credit...

Me: Why would I want to do that? I'm not big on being in debt.

CU Lady: Well, what if you want to buy a house or a car?

Me: I guess if I can't afford to pay cash, I can't buy it. I prefer that to being a slave to debt my whole life. Credit used to be a privilege that you had to earn, and credit cards were relatively rare. Now it's near impossible to function without one? That doesn't seem right to me considering the folks issuing the credit get fabulously rich while the rest of us just work day in and day out to pay the interest on the loans...

She then said something about buying gas on a credit card and paying it off every month blah blah blah... not sure what it was. I was probably thinking about boobs.

I went to Chase after that to see if the Wamu card I had been issued before Chase bought Wamu was still active. Not only was it not, but my record of having ever had an active account had been purged.

To Chase, I was an unperson. The nice account lady offered me "a shiny new Chase card" (she really said that) if I wanted to apply...

I declined.

Most people prefer to manage debt, as they can pretend they are more wealthy that they actually are.

I prefer to manage the paper coupons representing someone else's debt, and look poor.

[EE_]

A credit union I was in a few years ago does a credit check before opening an account for someone. When they ran my credit, the report spewed out a 4 digit number (1551, or something)... the lady actually had to go ask someone what it meant, as she hadn't seen it. She came back and told me it was because I have an extensive credit history, but had no active accounts for so long after paying them all off that my credit literally went off the scale. She informed me that it wasn't a good thing, as it was much the same as having no credit history.

CU Lady: You really should get a credit card and start rebuilding your credit...

Me: Why would I want to do that? I'm not big on being in debt.

CU Lady: Well, what if you want to buy a house or a car?

Me: I guess if I can't afford to pay cash, I can't buy it. I prefer that to being a slave to debt my whole life. Credit used to be a privilege that you had to earn, and credit cards were relatively rare. Now it's near impossible to function without one? That doesn't seem right to me considering the folks issuing the credit get fabulously rich while the rest of us just work day in and day out to pay the interest on the loans...

She then said something about buying gas on a credit card and paying it off every month blah blah blah... not sure what it was. I was probably thinking about boobs.

I went to Chase after that to see if the Wamu card I had been issued before Chase bought Wamu was still active. Not only was it not, but my record of having ever had an active account had been purged.

To Chase, I was an unperson. The nice account lady offered me "a shiny new Chase card" (she really said that) if I wanted to apply...

I declined.

Most people prefer to manage debt, as they can pretend they are more wealthy that they actually are.

I prefer to manage the paper coupons representing someone else's debt, and look poor.

Right-on!

I'd rather see people that only spend what they have, get ahead, then most that spend money they don't have yet.

Going into debt when interest rates are low can be a good thing if you can make money above the interest.
Another reason to go into debt is for an incorporated business, where you only risk someone else's money.

[Hitch]

Going into debt when interest rates are low can be a good thing if you can make money above the interest.
Another reason to go into debt is for an incorporated business, where you only risk someone else's money.

There is a huge temptation there. I've thought about creating an LLC, financing some obnoxiously expensive yacht, and take people out sailing with it (hot bikini babes of course). With an LLC, no personal assets would be on the hook. After a few years of living it up at a loss, give the yacht back to the bank and let the LLC go belly up.