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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Restricting Credit 
Checks for Employment Decisions Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) The use of credit reports as a factor in 
making hiring decisions has been found to be preva-
lent in a diverse array of occupations, and is not 
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limited to certain high-level management or execu-
tive positions. 
(2) According to the California Labor Federa-
tion, only 25 percent of employers researched the 
credit history of job applicants in 1998. However, 
this practice had increased to 43 percent by 2006 
and to 60 percent by 2011. 
(3) A study titled ‘‘Do Job Applicant Credit 
Histories Predict Job Performance Appraisal Rat-
ings or Termination Decisions?’’, published in 2012, 
found that, while credit history might conceptually 
measure a person’s level of responsibility, ability to 
meet deadlines, dependability, or integrity, it does 
not, in practice, actually predict an employee’s per-
formance or likelihood to quit. Credit reports contain 
many inaccuracies and credit history can be con-
taminated by events that are sometimes outside a 
person’s control, such as a sudden medical expense 
after an accident or the loss of a job during an eco-
nomic downturn. The study found that there is no 
benefit from using credit history to predict job per-
formance or turnover. 
(4) Despite the absence of data showing a cor-
relation between job performance and credit-worthi-
ness, employers continue to use credit checks as a 
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proxy for assessing character and integrity. Accord-
ing to a 2012 Society for Human Resource Manage-
ment survey, organizations indicated that they used 
credit checks on job candidates primarily to reduce 
or prevent theft and embezzlement and to minimize 
legal liability for negligent hiring. 
(5) The use of credit checks for employment 
purposes creates a true ‘‘catch-22’’ for unemployed 
people with impaired credit. For example, the finan-
cial hardship caused by losing a job may cause some 
unemployed individuals to make late or partial pay-
ments on their bills, but their poor credit standing 
caused by this negative information on their con-
sumer report can also impede their chances of ob-
taining a new job to end their financial distress. 
(6) A September 2014 report by the New York 
City Council’s Committee on Civil Rights noted that, 
for those who have been unemployed for an extended 
period of time and whose credit has suffered as they 
fell behind on bills, the use of credit reports in the 
hiring process can exacerbate and perpetuate an al-
ready precarious situation. 
(7) In a March 2013 Demos report titled ‘‘Dis-
credited: How Employment Credit Checks Keep Out 
Qualified Workers Out of a Job’’, one in four survey 
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participants who were unemployed said that a poten-
tial employer had requested to check their credit re-
port as part of a job application. Among job appli-
cants with blemished credit histories in the survey, 
one in seven had been told that they were not being 
hired because of their credit history. 
(8) While job applicants must give prior ap-
proval for a prospective employer to pull their credit 
reports under the FCRA, this authorization, as a 
practical matter, does not constitute an effective 
consumer protection because an employer may reject 
any job applicant who refuses a credit check. 
(9) Some negative information on a report may 
stem from uncontrollable circumstances, or signifi-
cant life events in a consumer’s life, such as a med-
ical crisis or a divorce. Demos found that poor credit 
is associated with household unemployment, lack of 
health coverage, and medical debt, which are factors 
that reflect economic conditions in the country and 
personal misfortune that have little relationship with 
how well a job applicant would perform at work. 
(10) In October 2011, FICO noted that from 
2008 to 2009 approximately 50 million people expe-
rienced a 20-point drop in their credit scores and 
about 21 million saw their scores decline by more 
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than 50 points. While the Great Recession reduced 
many consumers’ credit scores due to foreclosures 
and other financial hardships, the financial crisis 
had a particularly harsh impact on African Ameri-
cans and Latinos, as racial and ethnic minorities 
and communities of color were frequently targeted 
by predatory mortgage lenders who steered bor-
rowers into high-cost subprime loans, even when 
these borrowers would have qualified for less costly 
prime credit. 
(11) A May 2006 Brookings Institution report 
titled ‘‘Credit Scores, Reports, and Getting Ahead in 
America’’ found that counties with a relatively high-
er proportion of racial and ethnic minorities in the 
United States tended to have lower credit scores 
compared with counties that had a lower concentra-
tion of communities of color. 
(12) Studies have consistently found that Afri-
can American and Latino households tend, on aver-
age, to have lower credit scores than White house-
holds. The growing use of credit checks, therefore, 
may disproportionately screen otherwise qualified ra-
cial and ethnic minorities out of jobs, leading to dis-
criminatory hiring practices, and further exacer-
bating the trend where unemployment for African 
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American and Latino communities is elevated well 
above the rate of Whites. 
(13) A 2012 Demos survey found that 65 per-
cent of White respondents reported having good or 
excellent credit scores while over half of African 
American households reported only having fair or 
bad credit. 
SEC. 3. BANS THE USE OF CREDIT INFORMATION FOR 
MOST EMPLOYMENT DECISIONS. 
(a) IN GENERAL.—Section 604 of the Fair Credit 
Reporting Act (15 U.S.C. 1681b) is amended— 
(1) in subsection (a)(3)(B), by inserting ‘‘, sub-
ject to the requirements of subsection (b)’’ after 
‘‘purposes’’; and 
(2) in subsection (b)— 
(A) in paragraph (1)— 
(i) by amending the paragraph head-
ing to read as follows: ‘‘USE
OF CON-
SUMER REPORTS FOR EMPLOYMENT PUR-
POSES’’; 
(ii) in subparagraph (A), by redesig-
nating clauses (i) and (ii) as subclauses (I) 
and (II), respectively (and conforming the 
margins accordingly); 
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(iii) by redesignating subparagraphs 
(A) and (B) as clauses (i) and (ii), respec-
tively (and conforming the margins accord-
ingly); 
(iv) by striking the period at the end 
of clause (ii) (as so redesignated) and in-
serting ‘‘; and’’; 
(v) by striking ‘‘agency may furnish’’ 
and inserting ‘‘agency— 
‘‘(A) may furnish’’; and 
(vi) by adding at the end the following 
new subparagraph: 
‘‘(B) except as provided in paragraph (5), 
may not furnish a consumer report with respect 
to any consumer in which any information con-
tained in the report bears on the consumer’s 
creditworthiness, credit standing, or credit ca-
pacity.’’; and 
(B) by adding at the end the following new 
paragraphs: 
‘‘(5) REQUIREMENTS FOR CONSUMER REPORTS 
BEARING ON THE CONSUMER’S CREDITWORTHINESS, 
CREDIT STANDING, OR CREDIT CAPACITY.— 
‘‘(A) IN GENERAL.—A person may use a 
consumer report with respect to any consumer 
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in which any information contained in the re-
port bears on the consumer’s creditworthiness, 
credit standing, or credit capacity only if— 
‘‘(i) either— 
‘‘(I) the person is required to ob-
tain the report by a Federal, State, or 
local law; or 
‘‘(II) the information contained 
in the report is being used with re-
spect to a national security investiga-
tion (as defined in paragraph (4)(D)); 
‘‘(ii) none of the cost associated with 
obtaining the consumer report will be 
passed on to the consumer to whom the re-
port relates; and 
‘‘(iii) the information contained in the 
consumer report will not be disclosed to 
any other person other than— 
‘‘(I) in an aggregate format that 
protects a consumer’s personally iden-
tifiable information; or 
‘‘(II) as may be necessary to 
comply with any applicable Federal, 
State, or local equal employment op-
portunity law or regulation. 
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‘‘(B) DISCLOSURES.—A person who pro-
cures, or causes to be procured, a consumer re-
port described in subparagraph (A) for employ-
ment purposes shall, in the disclosure made 
pursuant to paragraph (2), include— 
‘‘(i) an explanation that a consumer 
report is being obtained for employment 
purposes; 
‘‘(ii) the reasons for obtaining such a 
report; and 
‘‘(iii) the citation to the applicable 
Federal, State, or local law or regulation 
described in subparagraph (A)(i)(I). 
‘‘(C) ADVERSE ACTIONS.—In using a con-
sumer report described in subparagraph (A) for 
employment purposes and before taking an ad-
verse action based in whole or in part on the re-
port, the person intending to take such adverse 
action shall, in addition to the information de-
scribed in paragraph (3), provide to the con-
sumer to whom the report relates— 
‘‘(i) the name, address, and telephone 
number of the consumer reporting agency 
that furnished the report (including, for a 
consumer reporting agency that compiles 
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and maintains files on consumers on a na-
tionwide basis, a toll-free telephone number 
established by such agency); 
‘‘(ii) the date on which the report was 
furnished; and 
‘‘(iii) the specific factors from the re-
port upon which the adverse action (as de-
fined in section 603(k)(1)(B)(ii)) was 
based. 
‘‘(D) NATIONAL
SECURITY
INVESTIGA-
TIONS.—The requirements of paragraph (4) 
shall apply to a consumer report described 
under subparagraph (A). 
‘‘(E) NON-CIRCUMVENTION.—With respect 
to a consumer report in which any information 
contained in the report bears on the consumer’s 
creditworthiness, credit standing, or credit ca-
pacity, if a person is prohibited from using the 
consumer report pursuant to subparagraph (A), 
such person may not, directly or indirectly, ei-
ther orally or in writing, require, request, sug-
gest, or cause any employee or prospective em-
ployee to submit such information to the person 
as a condition of employment. 
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‘‘(F) NON-WAIVER.—A consumer may not 
waive the requirements of this paragraph with 
respect to a consumer report. 
‘‘(6) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed to require a con-
sumer reporting agency to prevent a Federal, State, 
or local law enforcement agency from accessing in-
formation in a consumer report to which the law en-
forcement agency could otherwise obtain access.’’. 
(b) TECHNICAL AMENDMENT.—The Fair Credit Re-
porting Act (15 U.S.C. 1681 et seq.) is amended by strik-
ing ‘‘section 604(b)(4)(E)(i)’’ each place such term ap-
pears and inserting ‘‘section 604(b)(4)(D)(i)’’. 
(c) RULEMAKING.—Not later than the end of the 2- 
year period beginning on the date of the enactment of this 
Act, the Bureau of Consumer Financial Protection shall 
issue final rules to implement the amendments made by 
this Act. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 2 years after the date of the 
enactment of this Act. 
Æ 
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