Policy Resolution LMV-15-37

WHEREAS, the National Black Caucus of State Legislators’ (NBCSL) commitment to assisting citizens in obtaining meaningful employment is present in resolution BFI-14-26 “A RESOLUTION ON REDUCING CREDIT-BASED BARRIERS IN HIRING AND EMPLOYMENT”;

WHEREAS, NBCSL opposes any unlawful or discriminatory hiring practices that may negatively and unjustly impact a person’s ability to secure employment and opposes legislation that could be perceived as culturally biased;

WHEREAS, federal law allows employment credit checks under the Fair Credit Reporting Act (FCRA), which permits employers to request credit reports on job applicants and existing employees;

WHEREAS, credit reports were not designed as an employment screening tool, rather as a means for lenders to evaluate whether a borrower would be a good credit risk;

WHEREAS, those who would be most adversely impacted would be individuals in the low- and middle-income households with credit card debt, and households experiencing job loss, lack of health coverage, or medical debt;

WHEREAS, the potentially racially discriminatory impact of employment credit checks is the key reason that civil rights organizations, such as the NAACP, the National Council of La Raza, the Leadership Conference on Civil and Human Rights, and the Lawyers Committee for Civil Rights under Law oppose them;

WHEREAS, a new civil rights agenda must include consumer protection from arbitrary factors that limit one’s ability to prosper in a global economy;

WHEREAS, one of the factors many employers examine when determining whether to offer an applicant employment is the person’s credit information;

WHEREAS, from time to time, certain individuals fall on hard times resulting in the late payment or non-payment of financial obligations while still operating as a productive employee and citizen; and

WHEREAS, some employers use an applicant’s or employee’s credit report or credit history to deny employment to an applicant, discharge an employee, or determine compensation or the terms, conditions, or privileges of employment, but every state should prohibit an employer from these practices as long as the applicant or employee has demonstrated a solid and substantial work history since being employed.

THEREFORE BE IT RESOLVED, that the National Black Caucus of State Legislators (NBCSL) supports the adoption of legislation that directs employers to not use credit history/credit reports for the purposes of granting employment, employment promotions, and compensation increases that includes, but is not limited to the following reasonable exemptions:

1. it is required by federal or state law to inquire into an applicant’s or employee’s credit
   report or credit history for the purpose of employment;
2. it is a financial institution that accepts deposits insured by a federal agency, or is an
   affiliate or subsidiary of the financial institution; or
3. it is an entity, or an affiliate of an entity, that is registered as an investment advisor with
   the United States Securities and Exchange Commission;

BE IT FURTHER RESOLVED, if an employer violates such legislation, then the applicant or employee may file a written complaint with the applicable state agency, and the agency must investigate any such complaint to determines if the employer willfully or negligently violated such legislation;

BE IT FURTHER RESOLVED, that if a violation has been found to occur, then the commissioner (or appropriate authority) must try to resolve the matter, and, if deemed necessary, may issue a civil penalty depending upon the severity of the offense;

BE IT FURTHER RESOLVED, after an employer receives an order to pay a civil penalty, the employer may request a hearing, subject to the present law requirements regarding human rights discrimination, and further if an employer fails to comply with an order to pay a civil penalty, then the state may bring an action to enforce the order to pay a civil penalty in the;

BE IT FURTHER RESOLVED, that an employer would not be prohibited from performing an employment-related background investigation which:

• includes use of a consumer report or investigative consumer report;
• is authorized under the federal Fair Credit Reporting Act; and
• does not involve investigation of credit information;

BE IT FURTHER RESOLVED, that an employer may request or use an applicant’s or employee’s credit report or credit history if

• the applicant has received an offer of employment and the credit report or credit history will be used for a purpose other than a prohibited purpose described above; or
• the employer has a bona fide purpose for requesting or using information in the credit report or credit history that is substantially job-related and disclosed in writing to the employee or applicant; and

BE IT FINALLY RESOLVED, that a copy of this resolution be transmitted to the President of the United States, the Vice President of the United States, members of the United States House of Representatives and the United States Senate, and other federal and state government officials as appropriate.

• SPONSOR: Representative Karen Camper (TN)
• Committee of Jurisdiction: Labor, Military, and Veterans’ Affairs Policy Committee
• Certified by Committee Chair: Representative Sharon Beasley-Teague (GA)
• Ratified in Plenary Session: Ratification Date is December 12, 2014
• Ratification is certified by: Representative Joe Armstrong (TN), President