,,ib ,union ,calendar ,no4 #bdf #aafth ,,congress #ast ,session ,h4 ,r4 #cfad ,report ,no4 #aaf-cje ,,in ,,the ,,house ,,of ,,representatives ,july #b1 #bjai ,mr4 ,lawson of ,florida introduced the following bill2 which was referred to the ,committee on ,financial ,services ,november #ba1 #bjai;,additional sponsors3 ,ms4 ,tlaib1 ,ms4 ,pressley1 ,ms4 ,ocasio-,cortez1 ,mr4 ,cleaver1 and ,mr4 ,cohen ,november #ba1 #bjai ,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed ,strike out all after the enacting clause and insert the part printed in italic ,for text of introduced bill1 see copy of bill as introduced on ,july #b1 #bjai ,a ,,bill ,to amend the ,fair ,credit ,reporting ,act to ban the use of credit information for most employment decisions1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,restricting ,credit ,checks for ,employment ,decisions ,act4 #b4 ,findings ,congress finds the following3 7#a7 ,the use of credit reports as a factor in making hiring decisions has been found to be prevalent in a diverse array of occupations1 and is not limited to certain high-level management or executive positions4 7#b7 ,according to the ,california ,labor ,federation1 only #be percent of employers researched the credit history of job applicants in #aiih4 ,however1 this practice had increased to #dc percent by #bjjf and to #fj percent by #bjaa4 7#c7 ,a study titled ,do ,job ,applicant ,credit ,histories ,predict ,job ,performance ,appraisal ,ratings or ,termination ,decisions81 published in #bjab1 found that1 while credit history might conceptually measure a person's level of responsibility1 ability to meet deadlines1 dependability1 or integrity1 it does not1 in practice1 actually predict an employee's performance or likelihood to quit4 ,credit reports contain many inaccuracies and credit history can be contaminated by events that are sometimes outside a person's control1 such as a sudden medical expense after an accident or the loss of a job during an economic downturn4 ,the study found that there is no benefit from using credit history to predict job performance or turnover4 7#d7 ,despite the absence of data showing a correlation between job performance and credit-worthiness1 employers continue to use credit checks as a proxy for assessing character and integrity4 ,according to a #bjab ,society for ,human ,resource ,management survey1 organizations indicated that they used credit checks on job candidates primarily to reduce or prevent theft and embezzlement and to minimize legal liability for negligent hiring4 7#e7 ,the use of credit checks for employment purposes creates a true catch-#bb for unemployed people with impaired credit4 ,for example1 the financial hardship caused by losing a job may cause some unemployed individuals to make late or partial payments on their bills1 but their poor credit standing caused by this negative information on their consumer report can also impede their chances of obtaining a new job to end their financial distress4 7#f7 ,a ,september #bjad report by the ,new ,york ,city ,council's ,committee on ,civil ,rights noted that1 for those who have been unemployed for an extended period of time and whose credit has suffered as they fell behind on bills1 the use of credit reports in the hiring process can exacerbate and perpetuate an already precarious situation4 7#g7 ,in a ,march #bjac ,demos report titled ,discredited3 ,how ,employment ,credit ,checks ,keep ,out ,qualified ,workers ,out of a ,job1 one in four survey participants who were unemployed said that a potential employer had requested to check their credit report as part of a job application4 ,among job applicants with blemished credit histories in the survey1 one in seven had been told that they were not being hired because of their credit history4 7#h7 ,while job applicants must give prior approval for a prospective employer to pull their credit reports under the ,,fcra1 this authorization1 as a practical matter1 does not constitute an effective consumer protection because an employer may reject any job applicant who refuses a credit check4 7#i7 ,some negative information on a report may stem from uncontrollable circumstances1 or significant life events in a consumer's life1 such as a medical crisis or a divorce4 ,demos found that poor credit is associated with household unemployment1 lack of health coverage1 and medical debt1 which are factors that reflect economic conditions in the country and personal misfortune that have little relationship with how well a job applicant would perform at work4 7#aj7 ,in ,october #bjaa1 ,,fico noted that from #bjjh to #bjji approximately #ej million people experienced a #bj-point drop in their credit scores and about #ba million saw their scores decline by more than #ej points4 ,while the ,great ,recession reduced many consumers' credit scores due to foreclosures and other financial hardships1 the financial crisis had a particularly harsh impact on ,african ,americans and ,latinos1 as racial and ethnic minorities and communities of color were frequently targeted by predatory mortgage lenders who steered borrowers into high-cost subprime loans1 even when these borrowers would have qualified for less costly prime credit4 7#aa7 ,a ,may #bjjf ,brookings ,institution report titled ,credit ,scores1 ,reports1 and ,getting ,ahead in ,america found that counties with a relatively higher proportion of racial and ethnic minorities in the ,united ,states tended to have lower credit scores compared with counties that had a lower concentration of communities of color4 7#ab7 ,studies have consistently found that ,african ,american and ,latino households tend1 on average1 to have lower credit scores than ,white households4 ,the growing use of credit checks1 therefore1 may disproportionately screen otherwise qualified racial and ethnic minorities out of jobs1 leading to discriminatory hiring practices1 and further exacerbating the trend where unemployment for ,african ,american and ,latino communities is elevated well above the rate of ,whites4 7#ac7 ,a #bjab ,demos survey found that #fe percent of ,white respondents reported having good or excellent credit scores while over half of ,african ,american households reported only having fair or bad credit4 #c4 ,prohibition on the use of credit information for most employment decisions 7a7 ,in general ,section #fjd of the ,fair ,credit ,reporting ,act 7#ae ,u4,s4,c4 #afha;b7 is amended-- 7#a7 in subsection 7a77#c77;,b71 by inserting 1 subject to the requirements of subsection 7b7 after purposes2 and 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#a7-- 7i7 by amending the paragraph heading to read as follows3 ,use of consumer reports for employment purposes2 7ii7 in subparagraph 7,a71 by redesignating clauses 7i7 and 7ii7 as subclauses 7,i7 and 7,,ii71 respectively 7and conforming the margins accordingly72 7iii7 by redesignating subparagraphs 7,a7 and 7,b7 as clauses 7i7 and 7ii71 respectively 7and conforming the margins accordingly72 7iv7 by striking the period at the end of clause 7ii7 7as so redesignated7 and inserting 2 and2 7v7 by striking agency may furnish and inserting agency-- 7,a7 may furnish 2 and 7vi7 by adding at the end the following new subparagraph3 7,b7 except as provided in paragraph 7#e71 may not furnish a consumer report with respect to any consumer in which any information contained in the report bears on the consumer's creditworthiness1 credit standing1 or credit capacity4 2 and 7,b7 by adding at the end the following new paragraphs3 7#e7 ,requirements for consumer reports bearing on the consumer's creditworthiness1 credit standing1 or credit capacity 7,a7 ,in general ,a person may use a consumer report with respect to any consumer in which any information contained in the report bears on the consumer's creditworthiness1 credit standing1 or credit capacity only if-- 7i7 either-- 7,i7 the person is required to obtain the report by a ,federal1 ,state1 or local law or regulation2 or 7,,ii7 the information contained in the report is being used with respect to a national security investigation 7as defined in paragraph 7#d77;,d772 7ii7 none of the cost associated with obtaining the consumer report will be passed on to the consumer to whom the report relates2 and 7iii7 the information contained in the consumer report will not be disclosed to any other person other than-- 7,i7 in an aggregate format that protects a consumer's personally identifiable information2 or 7,,ii7 as may be necessary to comply with any applicable ,federal1 ,state1 or local equal employment opportunity law or regulation4 7,b7 ,disclosures ,a person who procures1 or causes to be procured1 a consumer report described in subparagraph 7,a7 for employment purposes shall1 in the disclosure made pursuant to paragraph 7#b71 include-- 7i7 an explanation that a consumer report is being obtained for employment purposes2 7ii7 the reasons for obtaining such a report2 and 7iii7 the citation to the applicable ,federal1 ,state1 or local law or regulation described in subparagraph 7,a77i77,i74 7,c7 ,adverse actions ,in using a consumer report described in subparagraph 7,a7 for employment purposes and before taking an adverse action based in whole or in part on the report1 the person intending to take such adverse action shall1 in addition to the information described in paragraph 7#c71 provide to the consumer to whom the report relates-- 7i7 the name1 address1 and telephone number of the consumer reporting agency that furnished the report 7including1 for a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis1 a toll-free telephone number established by such agency72 7ii7 the date on which the report was furnished2 and 7iii7 the specific factors from the report upon which the adverse action 7as defined in section #fjc7k77#a77;,b77ii77 was based4 7,d7 ,national security investigations ,the requirements of paragraph 7#d7 shall apply to a consumer report described under subparagraph 7,a74 7,e7 ,non-circumvention ,with respect to a consumer report in which any information contained in the report bears on the consumer's creditworthiness1 credit standing1 or credit capacity1 if a person is prohibited from using the consumer report pursuant to subparagraph 7,a71 such person may not1 directly or indirectly1 either orally or in writing1 require1 request1 suggest1 or cause any employee or prospective employee to submit such information to the person as a condition of employment4 7,f7 ,non-waiver ,a consumer may not waive the requirements of this paragraph with respect to a consumer report4 7#f7 ,rule of construction ,nothing in this subsection shall be construed to require a consumer reporting agency to prevent a ,federal1 ,state1 or local law enforcement agency from accessing information in a consumer report to which the law enforcement agency could otherwise obtain access4 4 7b7 ,technical amendment ,the ,fair ,credit ,reporting ,act 7#ae ,u4,s4,c4 #afha et seq47 is amended by striking section #fjd7;b77#d77;,e77i7 each place such term appears and inserting section #fjd7;b77#d77;,d77i74 7c7 ,rule of construction ,the amendments made by this ,act may not be construed as limiting the ability of a person to use non-financial or non-credit related consumer report information4 7d7 ,rulemaking ,not later than the end of the #b-year period beginning on the date of the enactment of this ,act1 the ,bureau of ,consumer ,financial ,protection shall issue final rules to implement the amendments made by this ,act4 7e7 ,effective date ,the amendments made by this section shall take effect #b years after the date of the enactment of this ,act4 ,november #ba1 #bjai ,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed