If Massachusetts Senator Elizabeth Warren (D-MA) has her way, employers will be banned from requiring that job applicants submit their credit history.
Many Americans who have fallen on hard times due to the recession are hindered even further by employers who check their credit history before determining whether the applicant will be considered for s position. Warren says banning this practice will go a long way towards restoring “basic fairness” for job seekers.
Warren also points out that there is no evidence which indicates that a person’s credit score impacts how he or she will perform on a job.
“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities,” Warren said. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. It makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and that can be riddled with inaccuracies.”
Using an applicant’s credit rating as a determinate for whether he or she will be hired punishes an applicant for having had a hard time in a tough economy. Just because a person has had a few “bad breaks” doesn’t mean that they have bad character, said Warren.
In 2010, the Department of Labor won a case against Bank of America for using credit reports to discriminate against African-Americans, so the issue of allowing employers to use credit reports to weed out job seekers is even more discriminatory than Warren suggests.