Credit Checks

News & Analysis as of

New York City Council Continues Push to Ban Credit Checks in Connection with Employment Decisions

The New York City Council’s Committee on Civil Rights recently held a hearing on a bill that would amend the New York City Human Rights Law to prohibit employers from basing an employment decision on the consumer credit...more

New York AG, Capital One Agree On Credit Screening Changes

New York Attorney General Eric T. Schneiderman recently announced an agreement with Capital One Financial Corporation that will require the bank to adopt new policies regarding the screening of consumers seeking to open...more

New York AG Obtains Agreement From Bank To Alter Customer Account Screening

On June 16, New York Attorney General (AG) Eric Schneiderman announced that a national bank agreed to adopt new policies governing its use of a credit bureau that screens individuals seeking to open checking or savings...more

More on INTERPOL, the UAE, and Bounced Checks

A reader recently sent in this comment, which has been modified to protect the reader's privacy...more

New Delaware Law “Encourages” State Vendors to “Ban the Box”

Delaware’s Governor recently signed a “ban the box” law to prohibit public employers from inquiring into or considering the credit or criminal history of a job candidate during the initial application process (up to and...more

Appellate Court Emphatically Rejects EEOC's Contention That Employer's Use Of Applicants' Credit Histories During Background Check...

In EEOC v. Kaplan, the EEOC alleged that Kaplan racially discriminated against African-American applicants because its use of credit histories as part of its background check process had a disparate impact on them. Kaplan is...more

The EEOC Loses Background Check Battle In The 6th Circuit

The Sixth Circuit issued a much anticipated ruling on April 9, 2014 related to the Equal Employment Opportunity Commission’s (“EEOC’s”) systemic targeting of employer background check policies. ...more

Sixth Circuit Affirms Summary Judgment Against EEOC in Credit Check Suit

In Equal Employment Opportunity Commission ("EEOC") v. Kaplan Higher Education Corp., No. 13-3408 (6th Cir. Apr. 9, 2014), the U.S. Court of Appeals for the Sixth Circuit affirmed the award of summary judgment against the...more

EEOC Dealt Setback On Credit Check Claim

Over the last couple years, the EEOC has been taking aim at companies that use credit checks as part of the application process, arguing that excluding applicants based on credit checks has a disparate impact on minority...more

EEOC Strikes Out In Criminal Background And Credit Check Litigation

The EEOC has been aggressively pursuing litigation against private businesses for alleged violations of Title VII based upon the use of criminal background and credit checks in the hiring process. The theory pursued by the...more

ECOA Gets More Teeth in North Carolina

In one of my prior “Drive Thrus” in Community Banking Exellence, I reminded everyone that lenders can never require a spousal guaranty, but can request one. The North Carolina Court of Appeals brought that fact home recently...more

U.S. District Court Decision Against EEOC: Use of Criminal Background and Credit History Checks in Making Hiring Decisions

A U.S. District Court judge in Maryland has dismissed a lawsuit that accused a nationwide marketing company of using background checks to discriminate against minority and male job applicants after finding the Equal...more

Proposed New York City Bill Would Ban Credit Checks from Hiring Process

On April 11, 2013, the New York City Council’s Committee on Civil Rights debated a proposed bill that would ban employers from using credit checks to evaluate prospective employees. The proposed bill, called the Stop Credit...more

Colorado Ninth State to Prohibit Credit Checks for Employment Purposes

On April 19, 2013, Colorado's governor signed S.B. 18 to prohibit employers from considering an applicant's or employee's credit history in employment decisions. California, Maryland, Connecticut, Hawaii, Illinois,...more

EEOC’s Credit Screening Loss Is Not Necessarily an Employer’s Win

On January 28, 2013, a federal court in Ohio handed the EEOC a loss when it ruled in favor of several employers for their use of a third party to perform credit checks on candidates for hire. The EEOC claimed that the...more

Privacy Breaches Can Be One-Two Punch for Employers: Arbitrator Awards Damages for Employee Credit Checks that Breached Privacy...

Twenty-six employees of the Alberta Justice and Attorney General’s Maintenance Enforcement Program (“MEP”) were each awarded $1250.00 in damages each after a Peace Officer carrying out a workplace investigation used their...more

New Law: California Restricts Use of Credit Checks by Employers

The practice of using pre-employment credit checks has come under attack for a variety of reasons. Governor Jerry Brown recently signed into law Assembly Bill 22 (AB 22) that restricts California employers from using consumer...more

Credit Checks In California Now Tougher Than Ever

Effective January 1, 2012, California employers will have to avoid yet another potential legal hazard that haunts businesses with the threat of costly penalties: the unauthorized use of consumer credit reports regarding job...more

Connecticut Mandates Paid Sick Leave and Bars Pre-Employment Credit Checks

With Democrats fully in control of both legislative houses and the governorship of a union-friendly state for the first time in more than a decade, two new laws have been enacted that place Connecticut at the leading edge of...more

Legal Challenges to Applicant Credit Checks

Employers face rising criticism regarding their use of credit histories in hiring decisions. Civil rights advocates raise concerns that use of credit histories unfairly disadvantages certain segments of the population....more

Better Double Check Your Use Of Credit Checks

Colorado, Maryland and Pennsylvania are the latest to join a growing number of states that have taken steps to limit an employer's ability to perform credit checks on its employees. So far, only four states have actually...more

Use of Credit Checks as a Hiring Screen Draws Questions

Credit checks have become a common tool for employers looking for information to screen employees. Especially for employers who are inundated with employment applications in this tight job market, credit checks are an easy...more

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