Congressmen Cohen and Gutierrez File Bill To Remove Financial Barriers To Employment
Congressman Luis Gutierrez, (D-IL) chairman of the Subcommittee on Financial Institutions and Consumer Credit, joined Congressman Cohen in introducing HR 3149, The Equal Employment For All Act. This bill would give some of our most vulnerable, “credit challenged” citizens – students, recent college graduates, low-income families, senior citizens, and minorities – the opportunity to begin rebuilding their credit history by obtaining a job. Far too often, employers turn down “credit challenged” applicants because they have erroneously linked credit scores to potential job performance.
“Last month, the unemployment rate in Memphis was 10.3 percent. That’s higher than the national average. In May, the unemployment for African-American men was 16.6 percent, almost double from the year before. At a time when people are struggling to find jobs, credit checks should not be used as a basis to deny employment to otherwise qualified candidates,” Congressman Cohen said.
“Financial problems reflected on a negative financial report often stem from circumstances outside of the person’s control such as medical problems, illnesses, or layoffs. It is unfair and makes no sense to further penalize those job seekers who want to work hard but have had financial difficulties by denying employment solely on the basis of their credit.”
“I am delighted to that Chairman Gutierrez has joined with me on a bill that would prevent employers from using information in a consumer report to make hiring determinations or taking adverse employment actions,” Congressman Cohen said. “This bill is necessary to prevent the loss of job opportunities for those who need them the most and to stop a vicious cycle that only hurts those who are trying to improve their credit.”
Chairman Gutierrez stated that “right now, the number of U.S. employers conducting pre-employment credit checks is on the rise, and too many Americans are caught in a preventable cycle of debt. They have been hit by an economy in crisis, they have fallen into bad credit, and —as a result— they cannot do the one thing that would enable them to climb out: get a job, work hard, and earn a better score. The Equal Employment for All Act represents simple, tangible and immediate action we can take to give hardworking but unemployed Americans a chance to, literally, work their way out of bad credit.”
BACKGROUND
In recent years, the number of employers using credit checks on potential employees has risen to 43%. According to a recent report, one-third of individuals making less than $45,000 a year have poor credit scores caused by the result of bankruptcies, loan delinquencies, divorce, medical problems or unemployment.
Even worse, the “credit challenged” have fallen victim to deceptive marketing practices by credit report companies or credit counseling services that charge outlandish fee’s that supposedly rehabilitate credit scores to help with employment.
HR 3149 would prohibit the use of consumer credit checks by employers as part of the hiring or firing process, unless the job involves national security, FDIC clearance, or significant financial responsibility (such as bank managers, loan officers, or financial managers).
The legislation is endorsed by National Consumer Law Center (on behalf of their low-income clients), Consumer Action, National Association of Consumer Advocates, Unite Here, National Fair Housing Alliance, National Employment Law Project, U.S. Public Interest Research Group, Legal Action Center, National H.I.R.E. Network, Community Legal Services of Philadelphia, Center for Economic Justice, Leadership Conference on Civil Rights and the NAACP.
KEY HIGHLIGHTS OF HR 3149
The bill would amend the Fair Credit Reporting Act to prohibit the use of consumer credit checks in relation to current and prospective employees for the purposes of making employment decisions.
Employers would also be prohibited from asking applicants to voluntarily submit to credit checks.
The bill would establish exceptions for employment that requires national security or FDIC clearance; state or local governmental agencies that require a consumer report; an employee or applicant applies for, or currently holds, a supervisory, managerial, professional, or executive position at a financial institution; or otherwise required by law.
HR 3149 is endorsed by over 25 organizations, including the NAACP, NAACP Legal Defense and Educational Fund, National Organization for Women, National Consumer Law Center, Leadership Conference on Civil Rights, National Fair Housing Alliance, Consumer Action, National Association of Consumer Advocates, Unite Here, National Employment Law Project, U.S. Public Interest Research Group, Legal Action Center, National H.I.R.E. Network, Community Legal Services of Philadelphia, Center for Economic Justice, Asian American Justice Center, Communication Workers of America, AFL-CIO, Lawyers’ Committee for Civil Rights Under Law, International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, National Employment Lawyers Association, National Partnership for Women and Families, National Women’s Law Center and Women Employed.
Congressman Steve Cohen (D-TN) authored the legislation which is cosponsored by Luis Gutierrez (D-IL); Other current cosponsors of HR 3149 include: Robert Brady (D-PA); Yvette Clarke (D-NY); William Lacy Clay (D-MO); John Conyers, Jr (D-MI); Danny Davis (D-IL); Donna Edwards (D-MD); Keith Ellison (D-MN); Al Green (D-TX); Raul Grijalva (D-AZ); Alcee Hastings (D-FL); Jesse Jackson, Jr. (D-IL); Sheila Jackson-Lee (D-TX); Eddie Bernice Johnson (D-TX); Henry “Hank” Johnson, Jr. (D-GA); Carolyn Kilpatrick (D-MI); John Lewis (D-GA); James McGovern (D-MA); Kendrick Meek (D-FL) Gregory Meeks (D-NY); Gwen Moore (D-WI); Jerrold Nadler (D-NY); Eleanor Holmes Norton (D-DC); Bobby Rush (D-IL); Betty Sutton (D-OH); Bennie Thompson (D-MS); Edolphus Towns (D-NY); Nydia Velazquez (D-NY); Maxine Waters (D-CA); and, Diane Watson (D-CA).
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________________________
Steven Broderick
Communications Director
Congressman Steve Cohen (TN-9)
1005 Longworth House Office Building
Washington, DC 20515
Direct: 202-226-7916
Main: 202-225-3265
steven.broderick@mail.house.gov