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New York Times: Group Urges New York City to End Credit Checks by Employers

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New York Times

By Nikita Stewart

New York City employers use credit checks to screen applicants for all sorts of jobs, like dog-walking and janitorial work. A coalition of municipal labor leaders, liberal advocates and left-leaning City Council members is seeking to end that practice, saying it disproportionately harms blacks and Hispanics without accurately predicting fraud or poor job performance.

An earlier push for a ban on credit checks by New York employers died in the Council in December 2013. But 41 of the 51 members have signed on to the bill in its current form, and its sponsors say it will be a top priority for the Council in the first three months of the year.

The fight over the bill, to the extent that there is one, will quite likely be over who is exempt from the ban.

The current bill still permits credit checks by businesses that are required to perform them under federal or state law, such as banks that hire mortgage loan officers. But in a letter to Mayor Bill de Blasio and the Council on Thursday that was intended as something of a pre-emptive strike, the coalition said it wanted to ensure that “unjustified exemptions” were not written into the bill.

“Sometimes the exemptions look benign, but they eat the law alive,” said Sarah Ludwig, a signee and a founder and co-director of the New Economy Project, a justice advocacy organization.

Proponents of a strict ban on credit checks by employers, who include a number of prominent political allies of the mayor, say it unfairly hurts Hispanic and black people who are already singled out by predatory lending practices that contribute to poor credit histories.

Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, said many of his members had undergone credit checks before or after being hired. The practice can place people with credit trouble in an untenable situation, he said: “People want to pay off loans, but because of their troubles, they can’t even get a job.”

Mr. de Blasio’s press secretary, Phil Walzak, said the administration “supports efforts to remove credit discrimination as an unnecessary obstacle to employment.” But he said it was studying “instances where exemptions may be appropriate.”

Other states have enacted exemptions covering workers in law enforcement, retail and the banking and insurance industries.

Kathryn S. Wylde, president and chief executive of the Partnership for New York City, said the mayor and the Council should consider “common-sense” exemptions adopted in 10 states and in Chicago. In Connecticut, she noted, credit checks are allowed for an employee with an expense account, a corporate credit card or special access to a computer network beyond a firewall.

“Technology has created new exposure for consumers that require great care for companies with regard to who they put in place with access to information,” Ms. Wylde said.

New York City employers are sensitive to concerns about discrimination in credit checks, she said, but believe they can be used responsibly and without bias.

Councilman Brad Lander, a Brooklyn Democrat who sponsored the legislation, said he drafted it because credit checks created unfairness in hiring. Though there is no evidence that workers with poor credit will perform badly or commit fraud, Mr. Lander said, “people have a prejudice that that would be true.”

He said he was not open to broad exemptions, such as those sought by financial services.

Councilman Ydanis Rodriguez, a Democrat from Manhattan and another proponent of the bill, said the legislation would aid many college students, too. “Sometimes, they didn’t build the best credit or they got into debt,” Mr. Rodriguez said. “It takes years for some people to clean their credit reports.”