Companies would be banned from using credit checks to weed out prospective employees under a bill introduced by a group of Senate Democrats.
“No one should be denied the chance to compete for a job because of a credit report that bears no relationship to job performance,” Sen. Elizabeth Warren of Massachusetts told reporters during a conference, according to the Washington Post
. “For millions of working families, a hard personal blow translates into a hard financial blow that will show up for years in a credit report.”
Urgent: Do You Approve Or Disapprove of President Obama's Job Performance? Vote Now in Urgent Poll
Businesses, however, say a poor credit report can be indicative of an untrustworthy employee.
“A credit check can serve an important function in certain jobs, especially in the financial services industry,” Elizabeth Milito, senior executive counsel at the National Federation of Independent Business, told the Post. “A blanket prohibition would disadvantage many businesses that use credit as one component of a background check.”
The bill would provide an exemption for jobs that require a national security clearance.
The liberal think tank Demos says nearly half of employers use credit checks before they hire,
including for positions such as maintenance clerks and delivery drivers. It argues that credit reports were intended to be used by financial institutions in determining whether to make a loan, not by restaurants looking to hire a dishwasher.
Backers of the bill say errors in credit reports are common, and that can lead companies to deny a job to a qualified candidate with good credit. CNN reported in February that as many as 42 million Americans have errors in their credit report
“Errors in credit reports can cost you a loan, a competitive interest rate, a job, a security clearance and insurance, John Ulzheimer, president of consumer education at SmartCredit.com told CNN.
Companies currently are allowed to legally check a person’s credit history under the federal Fair Credit Reporting Act, but they must first secure a job applicant’s consent.
Editor's Note: ObamaCare Is Here. Are You Prepared?
© 2014 Newsmax. All rights reserved.