Tuesday, May 11, 2010

The Assault on Credit Checks

As we reported in our post of April 19th (http://robertfitzpatrick.blogspot.com/2010/04/use-of-credit-checks-by-employers-is.html), on many fronts, employers’ reliance on credit checks for employment purposes is under attack.  The latest is a May 4th Feinstein amendment, S.Amdt. 3795 to S. 3217 (the Restoring American Financial Stability Act of 2010).  To date, no further action has been taken on the amendment.
Senator Feinstein’s amendment would revise the Fair Credit Reporting Act (15 U.S.C. § 1681b) to generally prohibit employers from obtaining credit reports for employment purposes.  Senator’s Feinstein’s amendment would permit the use of credit checks where the job “requires national security or Federal Deposit Insurance Corporation clearance.”  For example, the FDIC is authorized to review credit reports of its contractors as part of its check on contractors’ standards of integrity and fitness.  See 12 C.F.R. Part 366.
The Feinstein amendment would further permit the use of credit checks where:  the employee “applies for, or currently holds, employment with a State or local government agency which otherwise requires use of a consumer report”; the employee “applies for, or currently holds, any management position or other position involving the handling or supervision of, or access to, customer funds or accounts at a financial institution (including any credit union)”; and use of credit checks with respect to an employee or prospective employee is otherwise required by law.

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