IB 

Union Calendar No. 246 

116TH CONGRESS 

1ST SESSION H. R. 3614 

[Report No. 116–305] 

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 

NOVEMBER 21, 2019 

Additional sponsors: Ms. TLAIB, Ms. PRESSLEY, Ms. OCASIO-CORTEZ, Mr. 

CLEAVER, and Mr. COHEN

NOVEMBER 21, 2019 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on July 2, 2019] 


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A BILL 

To amend the Fair Credit Reporting Act to ban the use 

of credit information for most employment decisions, and 

for other purposes. 


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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 mak9 ing hiring decisions has been found to be prevalent in 

10 a diverse array of occupations, and is not limited to 

11 certain high-level management or executive positions. 

12 (2) According to the California Labor Federa13 tion, only 25 percent of employers researched the cred14 it history of job applicants in 1998. However, this 

15 practice had increased to 43 percent by 2006 and to 

16 60 percent by 2011. 

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

18 Histories Predict Job Performance Appraisal Ratings 

19 or Termination Decisions?’’, published in 2012, found 

20 that, while credit history might conceptually measure 

21 a person’s level of responsibility, ability to meet dead22 lines, dependability, or integrity, it does not, in prac23 tice, actually predict an employee’s performance or 

24 likelihood to quit. Credit reports contain many inac25 curacies and credit history can be contaminated by 


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1 events that are sometimes outside a person’s control, 

2 such as a sudden medical expense after an accident 

3 or the loss of a job during an economic downturn. The 

4 study found that there is no benefit from using credit 

5 history to predict job performance or turnover. 

6 (4) Despite the absence of data showing a cor7 relation between job performance and credit-worthi8 ness, employers continue to use credit checks as a 

9 proxy for assessing character and integrity. According 

10 to a 2012 Society for Human Resource Management 

11 survey, organizations indicated that they used credit 

12 checks on job candidates primarily to reduce or pre13 vent theft and embezzlement and to minimize legal li14 ability for negligent hiring. 

15 (5) The use of credit checks for employment pur16 poses creates a true ‘‘catch-22’’ for unemployed people 

17 with impaired credit. For example, the financial 

18 hardship caused by losing a job may cause some un19 employed individuals to make late or partial pay20 ments on their bills, but their poor credit standing 

21 caused by this negative information on their con22 sumer report can also impede their chances of obtain23 ing a new job to end their financial distress. 

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

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


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1 for those who have been unemployed for an extended 

2 period of time and whose credit has suffered as they 

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

4 hiring process can exacerbate and perpetuate an al5 ready precarious situation. 

6 (7) In a March 2013 Demos report titled ‘‘Dis7 credited: How Employment Credit Checks Keep Out 

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

9 participants who were unemployed said that a poten10 tial employer had requested to check their credit re11 port as part of a job application. Among job appli12 cants with blemished credit histories in the survey, 

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

14 hired because of their credit history. 

15 (8) While job applicants must give prior ap16 proval for a prospective employer to pull their credit 

17 reports under the FCRA, this authorization, as a 

18 practical matter, does not constitute an effective con19 sumer protection because an employer may reject any 

20 job applicant who refuses a credit check. 

21 (9) Some negative information on a report may 

22 stem from uncontrollable circumstances, or significant 

23 life events in a consumer’s life, such as a medical cri24 sis or a divorce. Demos found that poor credit is asso25 ciated with household unemployment, lack of health 


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1 coverage, and medical debt, which are factors that re2 flect economic conditions in the country and personal 

3 misfortune that have little relationship with how well 

4 a job applicant would perform at work. 

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

6 2008 to 2009 approximately 50 million people experi7 enced a 20-point drop in their credit scores and about 

8 21 million saw their scores decline by more than 50 

9 points. While the Great Recession reduced many con10 sumers’ credit scores due to foreclosures and other fi11 nancial hardships, the financial crisis had a particu12 larly harsh impact on African Americans and 

13 Latinos, as racial and ethnic minorities and commu14 nities of color were frequently targeted by predatory 

15 mortgage lenders who steered borrowers into high-cost 

16 subprime loans, even when these borrowers would 

17 have qualified for less costly prime credit. 

18 (11) A May 2006 Brookings Institution report 

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

20 America’’ found that counties with a relatively higher 

21 proportion of racial and ethnic minorities in the 

22 United States tended to have lower credit scores com23 pared with counties that had a lower concentration of 

24 communities of color. 


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1 (12) Studies have consistently found that African 

2 American and Latino households tend, on average, to 

3 have lower credit scores than White households. The 

4 growing use of credit checks, therefore, may dispropor5 tionately screen otherwise qualified racial and ethnic 

6 minorities out of jobs, leading to discriminatory hir7 ing practices, and further exacerbating the trend 

8 where unemployment for African American and 

9 Latino communities is elevated well above the rate of 

10 Whites. 

11 (13) A 2012 Demos survey found that 65 percent 

12 of White respondents reported having good or excellent 

13 credit scores while over half of African American 

14 households reported only having fair or bad credit. 

15 SEC. 3. PROHIBITION ON THE USE OF CREDIT INFORMA16 TION FOR MOST EMPLOYMENT DECISIONS. 

17 (a) IN GENERAL.—Section 604 of the Fair Credit Re18 porting Act (15 U.S.C. 1681b) is amended— 

19 (1) in subsection (a)(3)(B), by inserting ‘‘, sub20 ject to the requirements of subsection (b)’’ after ‘‘pur21 poses’’; and 

22 (2) in subsection (b)— 

23 (A) in paragraph (1)— 


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1 (i) by amending the paragraph head2 ing to read as follows: ‘‘USE OF CONSUMER

3 REPORTS FOR EMPLOYMENT PURPOSES’’; 

4 (ii) in subparagraph (A), by redesig5 nating clauses (i) and (ii) as subclauses (I) 

6 and (II), respectively (and conforming the 

7 margins accordingly); 

8 (iii) by redesignating subparagraphs 

9 (A) and (B) as clauses (i) and (ii), respec10 tively (and conforming the margins accord11 ingly); 

12 (iv) by striking the period at the end 

13 of clause (ii) (as so redesignated) and in14 serting ‘‘; and’’; 

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

16 and inserting ‘‘agency— 

17 ‘‘(A) may furnish’’; and 

18 (vi) by adding at the end the following 

19 new subparagraph: 

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

21 may not furnish a consumer report with respect 

22 to any consumer in which any information con23 tained in the report bears on the consumer’s 

24 creditworthiness, credit standing, or credit ca25 pacity.’’; and 


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

2 paragraphs: 

3 ‘‘(5) REQUIREMENTS FOR CONSUMER REPORTS

4 BEARING ON THE CONSUMER’S CREDITWORTHINESS, 

5 CREDIT STANDING, OR CREDIT CAPACITY.— 

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

7 consumer report with respect to any consumer in 

8 which any information contained in the report 

9 bears on the consumer’s creditworthiness, credit 

10 standing, or credit capacity only if— 

11 ‘‘(i) either— 

12 ‘‘(I) the person is required to ob13 tain the report by a Federal, State, or 

14 local law or regulation; or 

15 ‘‘(II) the information contained 

16 in the report is being used with respect 

17 to a national security investigation (as 

18 defined in paragraph (4)(D)); 

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

20 obtaining the consumer report will be 

21 passed on to the consumer to whom the re22 port relates; and 

23 ‘‘(iii) the information contained in the 

24 consumer report will not be disclosed to any 

25 other person other than— 


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1 ‘‘(I) in an aggregate format that 

2 protects a consumer’s personally iden3 tifiable information; or 

4 ‘‘(II) as may be necessary to com5 ply with any applicable Federal, State, 

6 or local equal employment opportunity 

7 law or regulation. 

8 ‘‘(B) DISCLOSURES.—A person who pro9 cures, or causes to be procured, a consumer re10 port described in subparagraph (A) for employ11 ment purposes shall, in the disclosure made pur12 suant to paragraph (2), include— 

13 ‘‘(i) an explanation that a consumer 

14 report is being obtained for employment 

15 purposes; 

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

17 report; and 

18 ‘‘(iii) the citation to the applicable 

19 Federal, State, or local law or regulation 

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

21 ‘‘(C) ADVERSE ACTIONS.—In using a con22 sumer report described in subparagraph (A) for 

23 employment purposes and before taking an ad24 verse action based in whole or in part on the re25 port, the person intending to take such adverse 


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1 action shall, in addition to the information de2 scribed in paragraph (3), provide to the con3 sumer to whom the report relates— 

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

5 number of the consumer reporting agency 

6 that furnished the report (including, for a 

7 consumer reporting agency that compiles 

8 and maintains files on consumers on a na9 tionwide basis, a toll-free telephone number 

10 established by such agency); 

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

12 furnished; and 

13 ‘‘(iii) the specific factors from the re14 port upon which the adverse action (as de15 fined in section 603(k)(1)(B)(ii)) was based. 

16 ‘‘(D) NATIONAL SECURITY INVESTIGA17 TIONS.—The requirements of paragraph (4) shall 

18 apply to a consumer report described under sub19 paragraph (A). 

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

21 to a consumer report in which any information 

22 contained in the report bears on the consumer’s 

23 creditworthiness, credit standing, or credit ca24 pacity, if a person is prohibited from using the 

25 consumer report pursuant to subparagraph (A), 


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1 such person may not, directly or indirectly, ei2 ther orally or in writing, require, request, sug3 gest, or cause any employee or prospective em4 ployee to submit such information to the person 

5 as a condition of employment. 

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

7 waive the requirements of this paragraph with 

8 respect to a consumer report. 

9 ‘‘(6) RULE OF CONSTRUCTION.—Nothing in this 

10 subsection shall be construed to require a consumer 

11 reporting agency to prevent a Federal, State, or local 

12 law enforcement agency from accessing information 

13 in a consumer report to which the law enforcement 

14 agency could otherwise obtain access.’’. 

15 (b) TECHNICAL AMENDMENT.—The Fair Credit Re16 porting Act (15 U.S.C. 1681 et seq.) is amended by striking 

17 ‘‘section 604(b)(4)(E)(i)’’ each place such term appears and 

18 inserting ‘‘section 604(b)(4)(D)(i)’’. 

19 (c) RULE OF CONSTRUCTION.—The amendments made 

20 by this Act may not be construed as limiting the ability 

21 of a person to use non-financial or non-credit related con22 sumer report information. 

23 (d) RULEMAKING.—Not later than the end of the 2- 

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

25 Act, the Bureau of Consumer Financial Protection shall 


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1 issue final rules to implement the amendments made by this 

2 Act. 

3 (e) EFFECTIVE DATE.—The amendments made by this 

4 section shall take effect 2 years after the date of the enact5 ment of this Act. 


pamtmann on DSKBC07HB2PROD with BILLS
Union Calendar No. 246 

116TH CONGRESS 

1ST SESSION H. R. 3614 

[Report No. 116–305] 

A BILL 

To amend the Fair Credit Reporting Act to ban the 

decisions, and for other purposes. use of credit information for most employment 

NOVEMBER 21, 2019 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pamtmann on DSKBC07HB2PROD with BILLS