I 

116TH CONGRESS 

1ST SESSION H. R. 3614 

To amend the Fair Credit Reporting Act to ban the use of credit information 

for most employment decisions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 2, 2019 

Mr. LAWSON of Florida introduced the following bill; which was referred to 

the Committee on Financial Services 

A BILL 

To amend the Fair Credit Reporting Act to ban the use 

of credit information for most employment decisions, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Restricting Credit 

5 Checks for Employment Decisions Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The use of credit reports as a factor in 

9 making hiring decisions has been found to be preva10 lent in a diverse array of occupations, and is not 


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1 limited to certain high-level management or execu2 tive positions. 

3 (2) According to the California Labor Federa4 tion, only 25 percent of employers researched the 

5 credit history of job applicants in 1998. However, 

6 this practice had increased to 43 percent by 2006 

7 and to 60 percent by 2011. 

8 (3) A study titled ‘‘Do Job Applicant Credit 

9 Histories Predict Job Performance Appraisal Rat10 ings or Termination Decisions?’’, published in 2012, 

11 found that, while credit history might conceptually 

12 measure a person’s level of responsibility, ability to 

13 meet deadlines, dependability, or integrity, it does 

14 not, in practice, actually predict an employee’s per15 formance or likelihood to quit. Credit reports contain 

16 many inaccuracies and credit history can be con17 taminated by events that are sometimes outside a 

18 person’s control, such as a sudden medical expense 

19 after an accident or the loss of a job during an eco20 nomic downturn. The study found that there is no 

21 benefit from using credit history to predict job per22 formance or turnover. 

23 (4) Despite the absence of data showing a cor24 relation between job performance and credit-worthi25 ness, employers continue to use credit checks as a 


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1 proxy for assessing character and integrity. Accord2 ing to a 2012 Society for Human Resource Manage3 ment survey, organizations indicated that they used 

4 credit checks on job candidates primarily to reduce 

5 or prevent theft and embezzlement and to minimize 

6 legal liability for negligent hiring. 

7 (5) The use of credit checks for employment 

8 purposes creates a true ‘‘catch-22’’ for unemployed 

9 people with impaired credit. For example, the finan10 cial hardship caused by losing a job may cause some 

11 unemployed individuals to make late or partial pay12 ments on their bills, but their poor credit standing 

13 caused by this negative information on their con14 sumer report can also impede their chances of ob15 taining a new job to end their financial distress. 

16 (6) A September 2014 report by the New York 

17 City Council’s Committee on Civil Rights noted that, 

18 for those who have been unemployed for an extended 

19 period of time and whose credit has suffered as they 

20 fell behind on bills, the use of credit reports in the 

21 hiring process can exacerbate and perpetuate an al22 ready precarious situation. 

23 (7) In a March 2013 Demos report titled ‘‘Dis24 credited: How Employment Credit Checks Keep Out 

25 Qualified Workers Out of a Job’’, one in four survey 


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1 participants who were unemployed said that a poten2 tial employer had requested to check their credit re3 port as part of a job application. Among job appli4 cants with blemished credit histories in the survey, 

5 one in seven had been told that they were not being 

6 hired because of their credit history. 

7 (8) While job applicants must give prior ap8 proval for a prospective employer to pull their credit 

9 reports under the FCRA, this authorization, as a 

10 practical matter, does not constitute an effective 

11 consumer protection because an employer may reject 

12 any job applicant who refuses a credit check. 

13 (9) Some negative information on a report may 

14 stem from uncontrollable circumstances, or signifi15 cant life events in a consumer’s life, such as a med16 ical crisis or a divorce. Demos found that poor credit 

17 is associated with household unemployment, lack of 

18 health coverage, and medical debt, which are factors 

19 that reflect economic conditions in the country and 

20 personal misfortune that have little relationship with 

21 how well a job applicant would perform at work. 

22 (10) In October 2011, FICO noted that from 

23 2008 to 2009 approximately 50 million people expe24 rienced a 20-point drop in their credit scores and 

25 about 21 million saw their scores decline by more 


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1 than 50 points. While the Great Recession reduced 

2 many consumers’ credit scores due to foreclosures 

3 and other financial hardships, the financial crisis 

4 had a particularly harsh impact on African Ameri5 cans and Latinos, as racial and ethnic minorities 

6 and communities of color were frequently targeted 

7 by predatory mortgage lenders who steered bor8 rowers into high-cost subprime loans, even when 

9 these borrowers would have qualified for less costly 

10 prime credit. 

11 (11) A May 2006 Brookings Institution report 

12 titled ‘‘Credit Scores, Reports, and Getting Ahead in 

13 America’’ found that counties with a relatively high14 er proportion of racial and ethnic minorities in the 

15 United States tended to have lower credit scores 

16 compared with counties that had a lower concentra17 tion of communities of color. 

18 (12) Studies have consistently found that Afri19 can American and Latino households tend, on aver20 age, to have lower credit scores than White house21 holds. The growing use of credit checks, therefore, 

22 may disproportionately screen otherwise qualified ra23 cial and ethnic minorities out of jobs, leading to dis24 criminatory hiring practices, and further exacer25 bating the trend where unemployment for African 


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1 American and Latino communities is elevated well 

2 above the rate of Whites. 

3 (13) A 2012 Demos survey found that 65 per4 cent of White respondents reported having good or 

5 excellent credit scores while over half of African 

6 American households reported only having fair or 

7 bad credit. 

8 SEC. 3. BANS THE USE OF CREDIT INFORMATION FOR 

9 MOST EMPLOYMENT DECISIONS. 

10 (a) IN GENERAL.—Section 604 of the Fair Credit 

11 Reporting Act (15 U.S.C. 1681b) is amended— 

12 (1) in subsection (a)(3)(B), by inserting ‘‘, sub13 ject to the requirements of subsection (b)’’ after 

14 ‘‘purposes’’; and 

15 (2) in subsection (b)— 

16 (A) in paragraph (1)— 

17 (i) by amending the paragraph head18 ing to read as follows: ‘‘USE OF CON19 SUMER REPORTS FOR EMPLOYMENT PUR20 POSES’’; 

21 (ii) in subparagraph (A), by redesig22 nating clauses (i) and (ii) as subclauses (I) 

23 and (II), respectively (and conforming the 

24 margins accordingly); 


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1 (iii) by redesignating subparagraphs 

2 (A) and (B) as clauses (i) and (ii), respec3 tively (and conforming the margins accord4 ingly); 

5 (iv) by striking the period at the end 

6 of clause (ii) (as so redesignated) and in7 serting ‘‘; and’’; 

8 (v) by striking ‘‘agency may furnish’’ 

9 and inserting ‘‘agency— 

10 ‘‘(A) may furnish’’; and 

11 (vi) by adding at the end the following 

12 new subparagraph: 

13 ‘‘(B) except as provided in paragraph (5), 

14 may not furnish a consumer report with respect 

15 to any consumer in which any information con16 tained in the report bears on the consumer’s 

17 creditworthiness, credit standing, or credit ca18 pacity.’’; and 

19 (B) by adding at the end the following new 

20 paragraphs: 

21 ‘‘(5) REQUIREMENTS FOR CONSUMER REPORTS

22 BEARING ON THE CONSUMER’S CREDITWORTHINESS, 

23 CREDIT STANDING, OR CREDIT CAPACITY.— 

24 ‘‘(A) IN GENERAL.—A person may use a 

25 consumer report with respect to any consumer 


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1 in which any information contained in the re2 port bears on the consumer’s creditworthiness, 

3 credit standing, or credit capacity only if— 

4 ‘‘(i) either— 

5 ‘‘(I) the person is required to ob6 tain the report by a Federal, State, or 

7 local law; or 

8 ‘‘(II) the information contained 

9 in the report is being used with re10 spect to a national security investiga11 tion (as defined in paragraph (4)(D)); 

12 ‘‘(ii) none of the cost associated with 

13 obtaining the consumer report will be 

14 passed on to the consumer to whom the re15 port relates; and 

16 ‘‘(iii) the information contained in the 

17 consumer report will not be disclosed to 

18 any other person other than— 

19 ‘‘(I) in an aggregate format that 

20 protects a consumer’s personally iden21 tifiable information; or 

22 ‘‘(II) as may be necessary to 

23 comply with any applicable Federal, 

24 State, or local equal employment op25 portunity law or regulation. 


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1 ‘‘(B) DISCLOSURES.—A person who pro2 cures, or causes to be procured, a consumer re3 port described in subparagraph (A) for employ4 ment purposes shall, in the disclosure made 

5 pursuant to paragraph (2), include— 

6 ‘‘(i) an explanation that a consumer 

7 report is being obtained for employment 

8 purposes; 

9 ‘‘(ii) the reasons for obtaining such a 

10 report; and 

11 ‘‘(iii) the citation to the applicable 

12 Federal, State, or local law or regulation 

13 described in subparagraph (A)(i)(I). 

14 ‘‘(C) ADVERSE ACTIONS.—In using a con15 sumer report described in subparagraph (A) for 

16 employment purposes and before taking an ad17 verse action based in whole or in part on the re18 port, the person intending to take such adverse 

19 action shall, in addition to the information de20 scribed in paragraph (3), provide to the con21 sumer to whom the report relates— 

22 ‘‘(i) the name, address, and telephone 

23 number of the consumer reporting agency 

24 that furnished the report (including, for a 

25 consumer reporting agency that compiles 


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1 and maintains files on consumers on a na2 tionwide basis, a toll-free telephone number 

3 established by such agency); 

4 ‘‘(ii) the date on which the report was 

5 furnished; and 

6 ‘‘(iii) the specific factors from the re7 port upon which the adverse action (as de8 fined in section 603(k)(1)(B)(ii)) was 

9 based. 

10 ‘‘(D) NATIONAL SECURITY INVESTIGA11 TIONS.—The requirements of paragraph (4) 

12 shall apply to a consumer report described 

13 under subparagraph (A). 

14 ‘‘(E) NON-CIRCUMVENTION.—With respect 

15 to a consumer report in which any information 

16 contained in the report bears on the consumer’s 

17 creditworthiness, credit standing, or credit ca18 pacity, if a person is prohibited from using the 

19 consumer report pursuant to subparagraph (A), 

20 such person may not, directly or indirectly, ei21 ther orally or in writing, require, request, sug22 gest, or cause any employee or prospective em23 ployee to submit such information to the person 

24 as a condition of employment. 


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1 ‘‘(F) NON-WAIVER.—A consumer may not 

2 waive the requirements of this paragraph with 

3 respect to a consumer report. 

4 ‘‘(6) RULE OF CONSTRUCTION.—Nothing in 

5 this subsection shall be construed to require a con6 sumer reporting agency to prevent a Federal, State, 

7 or local law enforcement agency from accessing in8 formation in a consumer report to which the law en9 forcement agency could otherwise obtain access.’’. 

10 (b) TECHNICAL AMENDMENT.—The Fair Credit Re11 porting Act (15 U.S.C. 1681 et seq.) is amended by strik12 ing ‘‘section 604(b)(4)(E)(i)’’ each place such term ap13 pears and inserting ‘‘section 604(b)(4)(D)(i)’’. 

14 (c) RULEMAKING.—Not later than the end of the 2- 

15 year period beginning on the date of the enactment of this 

16 Act, the Bureau of Consumer Financial Protection shall 

17 issue final rules to implement the amendments made by 

18 this Act. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall take effect 2 years after the date of the 

21 enactment of this Act. 

Æ 


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