Massachusetts Senator Elizabeth Warren recently introduced legislation which would ban employers from conducting credit checks of prospective employees during the hiring process.  Known as the Equal Employment for All Act, the measure would amend the Fair Credit Reporting Act to prohibit employers from using consumer credit reports to make employment decisions.  Notably, the Act would permit exceptions for certain positions, e.g. those requiring national security clearance.

According to Senator Warren,

It was once thought a credit history would provide insight into a person’s character and today, many companies routinely require credit reports from job applicants, but research has shown that an individual’s credit rating has little to no correlation with his or her ability to succeed in the workplace.  A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities.  Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills.

The legislation is supported by a number of worker advocacy and civil rights groups, although no companion measure has been introduced in the House.  The Act, would appear to mirror the goals of numerous state laws which already prohibit employers from utilizing credit information in making employment decisions.