Congressman Cohen and Senator Warren Introduce Equal Employment for All

WASHINGTON – Congressman Steve Cohen (TN-9) and Senator Elizabeth Warren (D-Massachusetts) today introduced the bicameral Equal Employment for All Act, which would prohibit employers from using credit reports to evaluate job applicants.

Congressman Cohen, who has introduced the measure in each of the past five Congresses, made the following statement:

“Using a job applicant’s credit history to deny employment is not just unfair, it also makes no sense because credit scores are not accurate predictors of job performance, and are often marred by errors. We should be doing everything we can to help people find and keep jobs – not hinder them. I am pleased that a consumer champion and credit expert like Senator Warren has again joined me in this effort and I look forward to working with her to pass our Equal Employment for All Act through both chambers.”

Senator Warren made the following statement:

“There’s no reason employers should use credit ratings as a part a prospective employee’s application process. The Equal Employment for All Act makes sure people looking for jobs aren’t discriminated against based on their financial history, and gives those who are struggling a fighting chance to get back in the game.”

A poor credit score is more often the result of medical bills or unemployment than a mark of someone’s character or ability to perform in the workplace – but employers are still using credit reports to evaluate job applicants.

Following the 2008 financial crisis, millions of Americans confronted job loss, shrinking home prices, and depreciated savings. For too many, the fallout from the crisis also damaged their credit. And credit reports are not always accurate: investigations have revealed flaws in more than a third of Americans’ credit reports. In addition, the Equal Employment Opportunity Commission (EEOC) has repeatedly acknowledged that the use of credit checks to screen out job applicants may disproportionately impact women and minorities, and therefore could be evidence of workplace bias. This practice also poses a significant barrier to Americans hoping to find employment to support their families.  Now, they're caught in a vicious cycle: To pay down their debt, they need a job, but they can't get hired because of their debt.

The Equal Employment for All Act would ensure that hiring and other employment decisions are made based on an individual’s merits and not their credit reports.  The bill does the following:

• Amends the Fair Credit Reporting Act to stop employers from requiring or suggesting that applicants disclose their credit history and from procuring a consumer or investigative report;
• Prohibits credit reporting agencies from providing credit reports to employers for use in employment decisions;
• Prohibits employers from disqualifying employees based on a poor credit rating, or information on a consumer’s creditworthiness, standing, or capacity;
• Includes exemptions for positions that require national security clearance or as otherwise required by law.

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