On April 16, 2015, the New York City Council (the “Council”) passed a bill (Int. 0261-2014) prohibiting employers from requesting or using the consumer credit history of an employee or job applicant when making employment decisions (the “Bill”).  More specifically, the Bill would make it a discriminatory practice to request or use the consumer credit history of applicants or employees by amending the City’s Human Rights Law to include the following provision:

Except as provided in this subdivision, it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency or agent thereof to request or to use for employment purposes the consumer credit history of an applicant for employment or employee, or otherwise discriminate against an applicant or employee with regard to hiring compensation or the terms, conditions or privileges of employment based on the consumer history of the applicant or employee.

The Bill defines “consumer credit history” broadly to include (a) consumer credit reports, (b) credit scores, or (c) information an employer obtains directly from the applicant or employee regarding “(1) details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit inquiries, or (2) bankruptcies, judgements or liens.”  The Bill also defines the term “consumer credit report” to include “any written or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history.”

Certain types of positions are exempted from the consumer credit history ban.  For example, the ban will not apply to positions in law enforcement, positions requiring bonding under federal, state or local law or requiring a security clearance, positions requiring employers to consider credit history under federal or state law, positions allowing an employee to modify digital security systems designed to prevent unauthorized use of the employer’s or client’s networks or databases, and non-clerical positions with regular access to trade secrets, intelligence information or national security information.  Furthermore, the Bill will not apply to positions where the individual has signatory authority over third party funds or assets valued at $10,000 or more, or authority to enter financial agreements valued at $10,000 or more on behalf of the employer.

The Bill was passed by the Council by a vote of 47-3.  It is widely expected that Mayor Bill de Blasio will sign the Bill into law.  If signed into law, New York City will join a growing number of jurisdictions that have enacted credit check bans, including California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, and Chicago.  However, the Bill is also considered one of the broadest bans to date since it does not include a broad exemption for all positions handling money.

Once signed into law, the ban on consumer credit histories would take effect 120 days after enactment.  Employers should review their background check policies to determine if changes to their policies and procedures may be necessary in order to comply with the law once enacted.

To read the full text of the Bill, click here.


* Brian DeShannon is a law school intern currently attending Brooklyn Law School.