on job candidates primarily to reduce or prevent 
theft and embezzlement and to minimize legal 
liability for negligent hiring. 
(E) The use of credit checks for employ-
ment purposes creates a true ‘‘catch-22’’ for 
unemployed people with impaired credit. For 
example, the financial hardship caused by losing 
a job may cause some unemployed individuals 
to make late or partial payments on their bills, 
but their poor credit standing caused by this 
negative information on their consumer report 
can also impede their chances of obtaining a 
new job to end their financial distress. 
(F) 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 exac-
erbate and perpetuate an already precarious sit-
uation. 
(G) In a March 2013 Demos report titled 
‘‘Discredited: How Employment Credit Checks 
Keep Out Qualified Workers Out of a Job’’, one 
in four survey participants who were unem-
VerDate Sep 11 2014 
18:18 Aug 27, 2021
Jkt 019200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H4120.IH
H4120
pamtmann on DSKBC07HB2PROD with BILLS
ployed said that a potential employer had re-
quested to check their credit report as part of 
a job application. Among job applicants with 
blemished credit histories in the survey, one in 
seven had been told that they were not being 
hired because of their credit history. 
(H) While job applicants must give prior 
approval for a prospective employer to pull their 
credit reports under the FCRA, this authoriza-
tion, as a practical matter, does not constitute 
an effective consumer protection because an 
employer may reject any job applicant who re-
fuses a credit check. 
(I) Some negative information on a report 
may stem from uncontrollable circumstances, or 
significant life events in a consumer’s life, such 
as a medical 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 eco-
nomic conditions in the country and personal 
misfortune that have little relationship with how 
well a job applicant would perform at work. 
(J) In October 2011, FICO noted that 
from 2008 to 2009 approximately 50 million 
VerDate Sep 11 2014 
18:18 Aug 27, 2021
Jkt 019200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H4120.IH
H4120
pamtmann on DSKBC07HB2PROD with BILLS
people experienced a 20-point drop in their 
credit scores and about 21 million saw their 
scores decline by more than 50 points. While 
the Great Recession reduced many consumers’ 
credit scores due to foreclosures and other fi-
nancial hardships, the financial crisis had a 
particularly harsh impact on African Americans 
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. 
(K) A May 2006 Brookings Institution re-
port titled ‘‘Credit Scores, Reports, and Getting 
Ahead in America’’ found that counties with a 
relatively higher proportion of racial and ethnic 
minorities in the United States tended to have 
lower credit scores compared with counties that 
had a lower concentration of communities of 
color. 
(L) Studies have consistently found that 
African American and Latino households tend, 
on average, to have lower credit scores than 
White households. The growing use of credit 
VerDate Sep 11 2014 
18:18 Aug 27, 2021
Jkt 019200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H4120.IH
H4120
pamtmann on DSKBC07HB2PROD with BILLS
checks, therefore, may disproportionately screen 
otherwise qualified racial and ethnic minorities 
out of jobs, leading to discriminatory hiring 
practices, and further exacerbating the trend 
where unemployment for African American and 
Latino communities is elevated well above the 
rate of Whites. 
(M) A 2012 Demos survey found that 65 
percent of White respondents reported having 
good or excellent credit scores while over half of 
African American households reported only hav-
ing fair or bad credit. 
(12) PROTECTIONS
FOR
CONSUMERS’ CREDIT 
INFORMATION.— 
(A) Despite heightened awareness, inci-
dents of ID theft continue to rise. In February 
2015, the Federal Government reported that ID 
theft was the top consumer complaint that it 
received for the 15th consecutive year. As these 
incidents increase, consumers experience signifi-
cant financial loss and emotional distress from 
the inability to safeguard effectively and inex-
pensively their credit information from bad ac-
tors. 
VerDate Sep 11 2014 
18:18 Aug 27, 2021
Jkt 019200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H4120.IH
H4120
pamtmann on DSKBC07HB2PROD with BILLS
(B) According to a Carnegie Mellon study, 
children are 50 times more likely than adults to 
have their identities stolen. Child identities are 
valuable to thieves because most children do not 
have existing files, and their parents may not 
notice fraudulent activity until their child ap-
plies for a student loan, a job, or a credit card. 
As a result, the fraudulent activity of the bad 
actors may go undetected for years. 
(C) Despite the increasing incidents of 
children’s ID theft, parents who want to 
proactively prevent their children from having 
their identity stolen, may not be able to do so. 
Only one of the three nationwide CRAs cur-
rently allows parents from any State to set up 
a freeze for a minor child. At the other two na-
tionwide CRAs, parents can only obtain a freeze 
after a child has become an ID theft victim be-
cause, it is only at this point, that these CRAs 
have an existing credit file for the child. While 
many States have enacted laws to address this 
problem, there is no existing Federal law. 
(D) According to Javelin Strategy & 
Research’s 2015 Identity Fraud study, $16 bil-
lion was stolen by fraudsters from 12.7 million 
VerDate Sep 11 2014 
18:18 Aug 27, 2021
Jkt 019200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H4120.IH
H4120
pamtmann on DSKBC07HB2PROD with BILLS