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City Council Passes Bill to Ban Credit Checks for Most Job Seekers

By Jeff Mays | April 16, 2015 3:44pm
 The City Council overwhelmingly passed legislation Thursday that prevents all but a few types of employers from using credit checks for hiring, promotion and rentention decisions.
City Council Passes Bill to Ban Credit Checks for Most Job Seekers
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CITY HALL — Ramon Lebron knew he was the perfect candidate for the information technology job at a financial firm. The company was interested in him after an interview but told him that they would check his credit as part of the hiring process.

Lebron, 24, planned to use his earnings to help his grandparents make ends meet but he never heard back from his potential employer, which he declined to name. When he called, the company said they had moved on to other candidates.

"I knew it was my credit," said Lebron, now a student at Bronx Community College. "I had no credit history at all."

Now Lebron won't have to worry about a credit check when he goes out for his next job. The City Council overwhelmingly passed legislation Thursday that prevents all but a few types of employers from using credit checks for hiring, promotion and retention decisions. Previously, there were no restrictions.

"This is the most stringent legislation of its type in the country," said the law's primary sponsor Brooklyn Councilman Brad Lander.

"It's no different if you discriminate against someone based on race or gender," Lander said of the measure, which alters the city's Human Rights Law to make it illegal and discriminatory to use credit history in employment decisions.

According to the Society for Human Resource Management, 13 percent of employers use credit checks on all hires while 47 percent of employers use credit checks on select potential employees.

Using credit checks unfairly discriminates against minority and low income workers primarily because there is no proof that one's credit history is indicative of future job performance, said proponents of the bill.

New Yorkers with poor credit because of healthcare debts, late student loans or the victims of predatory lending, are prevented from righting their financial ships because they are denied jobs.

On top of that, it is estimated that 25 percent of all credit reports have serious errors, the officials said.

"You are in a Catch-22," said Emmanuel Caicedo, a senior campaign strategist with Demos, one member of a coalition of 79 labor and civil rights organizations that formed the NYC Coalition to Stop Credit Checks in Employment.

"You can't pay your bills and so your credit is bad. And then you can't get a job to pay your bills because of your credit."

Ten states and the city of Chicago prohibit the use of credit checks for employment decisions but several of them exempt the financial industry and banks from the law, exclude managerial positions and allow employers to request a credit check because they feel its important for the position.

New York City's law does not have any of those blanket exemptions, said Lander.

Credit checks would be allowed where state or federal law requires such as mortgage brokers.

Employers would also be allowed to run credit checks on chief financial officers, police and Department of Investigation investigators, cyber security and intelligence workers, as well as elected officials and other high-ranking city officials subject to Conflict of Interest Board disclosures.

Mayor Bill de Blasio is expected to sign the bill after his counsel Maya Wiley expressed concerns about making sure appropriate exemptions were written into the law at a hearing last year.

“Credit discrimination is oftentimes an unnecessary obstacle to New Yorkers getting jobs, and we will continue to work with the City Council to help put more New Yorkers on pathways to jobs," said de Blasio spokeswoman Ishanee Parikh.

There was little de Blasio could do to stop the law from going forward since it passed with enough votes to override a veto.

Queens Councilman Mark Weprin was one of three council members who voted against the bill, saying he didn't feel comfortable telling companies how to conduct their business.

"This is a little bit too much of the nanny state," said Weprin.

Most council members disagreed.

"Just because you've struggled with medical bills or student loans does not make you any less hard working, qualified or trustworthy than anyone else," said Council Speaker Melissa Mark-Viverito. "This bill is about opportunity."

That's why Shelly Martin, 43, joined the coalition to pass the law after a failed business venture left her credit in shambles and unable to get a job to support herself.

"How can you change your credit, change your life if you don't have employment?" Martin asked Thursday during a rally on the steps of City Hall. "I felt like my choices for a better life were taken away."