Credit Catch 22
On Wednesday, February 6, Shana Khader and Erica Kyzmir, attorneys with NYLAG’s Consumer Protection Project, gathered with others on the steps of City Hall to call for passage of legislation in New York City that would restrict the use of credit reports in hiring decisions. Incredibly, over half of all employers currently check the credit histories of job applicants and employees, and then use this information to make hiring, promoting, firing, and other employment decisions.
It is unfair to base employment decisions on poor credit brought upon by the recession, a catastrophic illness, a divorce, or other life events out of one’s control. There is no evidence that a person’s credit history has anything to do with work performance. There is plenty of evidence, however, that if you don’t have a job you will have a hard time paying your bills, and your credit rating may suffer as a result. Here’s the catch: You need a job to get out of debt, but your debt keeps you unemployed.
Credit-history screening eliminates opportunities for millions of workers and their families — and also hurts employers by reducing the pool of talented, motivated workers who can build businesses and strengthen our economy. Job-related credit screenings also perpetuate discrimination against minorities, students and immigrants, who have been long victimized by predatory and deceitful lending practices that lead to mounting debt and poor credit. Did I mention that an estimated one in four credit reports contains a serious error? It’s time New York passed a law to prevent this injustice.
A survey to be released next week by Rutgers University reports that nearly a quarter of Americans say they were laid off at some point after the recession hit, and nearly eight out of ten say they know someone who has lost a job. Unemployment is the sad new normal for too many Americans. Let’s not allow unfair, discriminatory and inaccurate credit checks to stand between qualified workers and the jobs they deserve.
NYLAG is a member of the New York Coalition to Stop Credit Checks in Employment. I urge you to join us in this campaign at www.creditcatch22.org and end employer credit checks now.
Blog Post by Yisroel Schulman
President & Attorney-in-Charge