Gaining Momentum, Cohen Bill to Prevent Employers from Using Credit Checks in Hiring Process Introduced in the Senate

Greater Memphis residents have among the lowest average credit ratings in America

[WASHINGTON, D.C.] – Congressman Steve Cohen (TN-09) today commended U.S. Senator Elizabeth Warren (MA) on introducing his legislation, the Equal Employment for All Act, in the United States Senate. The legislation, which is cosponsored by 6 other Senators and 31 U.S. Representatives in the House, would help protect job applicants from unfair discrimination from employers based on less-than-stellar or inaccurate credit ratings.

“Using a job applicant’s credit history to deny employment is not fair because personal credit history is not an accurate predictor of job performance,”said Congressman Cohen.“We should be doing everything in our power to help people find jobs during these tough economic times – not hinder them.Having Senator Warren and other consumer champions on our side is great news and I look forward to working with her to pass our EqualEmployment for All Act.”

Congressman Cohen originally introduced the Equal Employment for All Act in 2009 to prohibit employers from using credit checks and bankruptcy filings in the hiring process unless the position sought involves national security, FDIC clearance or tremendous financial responsibility.

“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,”Senator Warren said.“Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness -- let people compete on the merits, not on whether they already have enough money to pay all their bills.”

According to the Society for Human Resource Management, the number of U.S. employers conducting pre-employment credit checks is on the rise, up from 36 percent to 43 percent. It was previously thought that credit history may provide insight into an individual's character, but research has shown that an individual's credit rating has little to no correlation with his or her ability to be successful in the workplace.

Not only are credit ratings a poor indicator of performance, but they are often inaccurate in the first place. Earlier this year, a study from the Federal Trade Commission suggested that errors in credit reports are common and, in many cases, have been difficult to correct.

The Equal Employment for All Act has been endorsed by more than 40 organizations, including 9to5, AFGE Women's and Fair Practices Departments, American Association for Affirmative Action (AAAA), American Association of People with Disabilities (AAPD), American Federation of Labor-Congress of Industrial Relations (AFL-CIO), American Federation of State, County and Municipal Employees (AFSCME), Americans for Financial Reform, Asian American Justice Center, Bazelon Center for Mental Health Law, Black Women's Roundtable, Campaign for Community Change, Charles Hamilton Houston Institute for Race & Justice, Center for Law and Social Policy (CLASP), Consumer Action, Dēmos, Disability Rights Education and Defense Fund (DREDF), Disability Rights Legal Center, Job Opportunities Task Force, Lawyers' Committee for Civil Rights Under Law, The Leadership Conference on Civil and Human Rights, Legal Action Center, MFY Legal Services, NAACP, NAACP Legal Defense and Educational Fund, National Association of Consumer Advocates, National Black Justice Coalition, National Coalition on Black Civic Participation, National Consumer Law Center (on behalf of its low-income clients), National Council of La Raza, National Council on Independent Living, National Employment Law Project, National Employment Lawyers Association (NELA), National Fair Housing Alliance, National Gay and Lesbian Task Force Action Fund, National Network to End Domestic Violence, National Organization for Women, National Partnership for Women and Families, National Women's Law Center, National Workrights Institute, Neighborhood Economic Development Advocacy Project (NEDAP), New York Legal Assistance Group, PolicyLink, Poverty and Race Research Action Council, Public Citizen, Public Justice Center, Service Employees International Union (SEIU), and U.S. PIRG.

U.S. Senators Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Patrick Leahy (D-Vt.), Edward J. Markey (D-Mass.), Jeanne Shaheen (D-N.H.), and Sheldon Whitehouse (D-R.I.) joined Senator Warren in cosponsoring the Senate bill. Congressman Cohen’s companion legislation in the House has 31 cosponsors.