State Bill would Ban Employers' Access to Credit Report

While criminal background checks make a certain sense as part of the employment process, less scrutable is the practice of credit checks.

Washington state Democrat State Sen. Steve Hobbs introduced a bill last week, SB 5827, that would prohibit employers from obtaining a job applicant’s credit report as part of the customary background check except in certain cases, such as public safety or financial positions.

Employers who use credit reports as part of the background check claim that they’re a way of determining if the person is responsible or trustworthy.  A person who doesn’t pay a debt when he can and should shows a lack of responsibility, the thinking goes, that might bleed over into job performance.

However, credit reports aren’t free from error, claim consumer advocates.  One in four credit reports is the figure that usually gets mentioned, pulled from a 2004 survey released by U.S. PIRG, a public interest research group.

"Employment should be based on the applicant’s education, experience and job skill and not past credit problems," said Hobbs.  "What it’s doing is it’s punishing those in lower incomes struggling to make ends meet," he said. "It’s a barrier that we need to remove."

The Senate Consumer Protection and Housing Committee plans to hold a public hearing on the bill Thursday.