What's happening
This bill prohibits most employers and agencies in New York from using consumer credit history in hiring, employment, and licensing decisions, with specific exemptions.
Why it matters
Expands employment protections for individuals with poor credit histories. by preventing most employers from considering credit information, thus reducing barriers to jobs for people who have experienced financial hardship, medical debt, or other credit issues unrelated to job performance.
Narrows exceptions to high-trust or high-security positions. , meaning only jobs involving law enforcement, significant financial responsibilities, access to sensitive security or trade secrets, and positions specifically required by law to check credit can use credit history—limiting the broad, often arbitrary use of these checks in hiring.
Limits the use of credit checks in government licensing and permitting. , protecting applicants from being denied professional or business opportunities due to credit issues unless specifically mandated by law, while still allowing agencies to consider unpaid taxes, fines, or legal judgments.
Requires oversight and transparency. The Division of Human Rights must collect data on how exemptions are used and report to the legislature within two years, providing a check on potential abuse or overuse of the exceptions to this new rule.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Ban Credit Checks For Jobs
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Recommit, enacting clause stricken
- Referred to consumer protection
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3124
2019-2020 Regular Sessions
IN SENATE
February 4, 2019
Introduced by Sen. BIAGGI -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection
AN ACT to amend the general business law, in relation to prohibiting the disclosure or use of a person's consumer credit history to an employer, labor organization, employment agency or agent thereof for purposes of employment decisions
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 380-a of the general business law is amended by adding a new subdivision (u) to read as follows:
(u) The term "consumer credit history" means an individual's credit worthiness, credit standing, credit capacity or payment history, as indicated by:
(1) a consumer credit report;
(2) credit score; or
(3) information an employer obtains directly from the individual regarding (i) details about credit accounts, including the individual's number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit or prior credit report inquiries, or (ii) bankruptcies, judgments or liens.
A consumer credit report shall 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.
§ 2. Subdivision (d) of section 380-b of the general business law is relettered subdivision (f) and two new subdivisions (d) and (e) are added to read as follows:
(d) (1) Except as provided in this subdivision, it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency or any agent thereof to request or to use, and a violation of this article for any person to disclose, for employment purposes the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01243-01-9
S. 3124 2
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 credit history of the applicant or employee.
(2) Paragraph one of this subdivision shall not apply to:
(i) an employer, or agent thereof, that is required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securities exchange act of 1934, as amended to use an individual's consumer credit history for employment purposes;
(ii) persons applying for positions as or employed:
(A) as peace officers or police officers, as those terms are defined in subdivisions thirty-three and thirty-four of section 1.20 of the criminal procedure law, respectively, or in a position with a law enforcement or investigative function in a law enforcement agency;
(B) in a position in which an employee is required to be bonded under local, state or federal law;
(C) in a position in which an employee is required to posses security clearance under federal law or the law of any state;
(D) in a non-clerical position having regular access to trade secrets, intelligence information or national security information;
(E) in a position: (I) having access to third party, consumer or employer funds or assets valued at ten thousand dollars or more; or (II) that involves a fiduciary responsibility to the employer with the authority to enter financial agreements or initiate, modify or approve payments, valued at ten thousand dollars or more on behalf of the employer; or
(F) in a position with regular duties that allow the employee to design, monitor, access, provision access and/or modify (I) systems, applications or databases containing confidential employer and/or customer data; or (II) digital security systems established to prevent the unauthorized use of the employer's or client's networks or databases.
(3) Paragraph one of this subdivision shall not be construed to affect the obligations of persons required by state or local law relating to disclosures by public employees of conflicts of interest.
(4) As used in this subdivision:
(i) The term "intelligence information" means records and data compiled for the purpose of criminal investigation or counterterrorism, including records and data relating to the order or security of a correctional facility, reports of informants, investigators or other persons, or from any type of surveillance associated with an identifiable individual, or investigation or analysis of potential terrorist threats.
(ii) The term "national security information" means any knowledge relating to the national defense or foreign relations of the United States, regardless of its physical form or characteristics, that is owned by, produced by or for, or is under the control of the United States government and is defined as such by the United States government and its agencies and departments.
(iii) The term "trade secrets" means information that: (A) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (C) can reasonably be said to be the end product of significant innovation.
S. 3124 3
The term "trade secrets" does not include general proprietary company information such as handbooks and policies. The term "regular access to trade secrets" does not include access to or the use of client, customer or mailing lists.
(5) Nothing in this subdivision shall preclude an employer from requesting or receiving consumer credit history information pursuant to a lawful subpoena, court order or law enforcement investigation.
(6) Paragraph one of this subdivision shall not apply to any city with a population of one million or more.
(e) (1) Except as otherwise provided in this subdivision, it shall be an unlawful discriminatory practice for any state or municipal agency to request or use, and a violation of this article for any person to disclose, for licensing or permitting purposes information contained in the consumer credit history of an applicant, licensee or permittee for licensing or permitting purposes.
(2) Paragraph one of this subdivision shall not apply to an agency required by state or federal law or regulations to use an individual's consumer credit history for licensing or permitting purposes.
(3) Paragraph one of this subdivision shall not be construed to affect the ability of an agency to consider an applicant's, licensee's, registrant's or permittee's failure to pay any tax, fine, penalty or fee for which liability has been admitted by the person liable therefor, or for which judgment has been entered by a court or administrative tribunal of competent jurisdiction, or any tax for which a government agency has issued a warrant, or a lien or levy on property.
(4) Nothing in this subdivision shall preclude a licensing agency from requesting, receiving, or using consumer credit history information obtained pursuant to a lawful subpoena, court order or law enforcement investigation.
(5) Paragraph one of this subdivision shall not apply to any city with a population of one million or more.
§ 3. The division of human rights shall request information from state and local agencies and non-governmental employers regarding the agencies' and employers' use of the exemptions established in subdivision (d) of section 380-b of the general business law as added by section two of this act for purposes of hiring and employment. Within two years of the effective date of this act, the division of human rights shall submit to the legislature a report concerning the results of such request and any relevant feedback from agencies and employers.
§ 4. This act shall take effect on the one hundred twentieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to prohibiting the disclosure or use of a person's consumer credit history to an employer, labor organization, employment agency or agent thereof for purposes of employment decisions
Purpose or general idea of bill
This bill would prohibit an employer or potential employer from using a job applicant or employee's consumer credit report in his or her deci- sion to hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment.
Summary of specific provisions
Section 1: Amends section 380-a of the general business law to add a new definition of consumer credit history.
Read the full memo (843 words)
Section 2: Amends 380-b of the general business law by relettering subdivision (d) subdivision (f) and adding two new subdivisions (d) and (e)to state that it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency or any 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 credit history of the applicant or employee. Also outlines exceptions for certain employers, employees, and applicants consistent with the administrative code of the city of New York. These provisions do not preclude an employer from requesting or receiving consumer credit histo- ry information pursuant to a lawful subpoena, court order or law enforcement investigation.
It shall additionally be an unlawful discriminatory practice for any state or municipal agency to request or use for licensing or permitting purposes information contained in the consumer credit history of an applicant, licensee or permittee for licensing or permitting purposes. This does not apply to an agency required by state or federal law or regulations to use an individual's consumer credit history for licensing or permitting purposes. These provisions should not be construed to affect the ability of an agency to consider an applicant's, licensee's, registrant's or permittee's failure to pay any tax, fine, penalty or fee for which liability has been admitted by the person liable therefor, or for which judgment has been entered by a court or administrative tribu- nal of competent jurisdiction, or any tax for which a government agency has issued a warrant, or a lien or levy on property. Further, these provisions shall preclude a licensing agency from requesting, receiving, or using consumer credit history information obtained pursuant to a lawful subpoena, court order or law enforcement investigation.
Section 3: Directs the division of human rights shall request informa- tion from state and local agencies and nongovernmental employers regard- ing the agencies' and employers' use of the exemptions established by subdivision (d) of 380-b of the general business law for purposes of hiring and employment. Within 2 years of the effective date of this act, the division of human rights shall submit to the legislature a report concerning the results of such request and any relevant feedback from agencies and employers.
Section 4: Effective date. This act shall take effect on the one hundred twentieth day after it shall have become a law.
Justification
This bill would prohibit an employer or potential employer from using a job applicant's or employee's consumer credit report in his or her deci- sion to hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment.
There is little evidence that shows a correlation between credit history and job performance. Nonetheless, in today's job market, the majority of large/big employers are now using credit checks as part of their hiring process and in how they treat their existing employees. In addition to lacking any such meaningful correlation, a recent Federal Trade Commis- sion study indicated that as many as one in four consumers may have a "material error" in their credit reports. At a recent public hearing on the accuracy and use of consumer credit reports, both the credit report- ing industry and numerous consumer advocates testified that millions of Americans have errors in their credit reports that put them in a lower credit risk tier, whether they are aware of any such errors or not.
The United States, as a whole, is still feeling the sting of the Great Recession. Many New Yorkers, through no fault of their own, have less than ideal credit histories that may stem from issues completely unre- lated to their job performance or capabilities. These consumers are disadvantaged because employers are using credit reports to determine if an applicant or employee is worthy of a job or a promotion. This bill would put an end to this practice.
Prior legislative history
2017-18: A.5310A - Ordered to Third Reading Calendar/S.5653B - Referred to Consumer Protection 2015-16: A.2372 - Referred to Consumer Affairs and Protection/S.1545A Referred to Consumer Protection 2013-14: A.7056- Passed Assembly/S.3868-B- Referred to Consumer Protection
Fiscal implications
None to the State.
Effective date
This act shall take effect 120 days after it becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.