A new law has been proposed in Maryland to restrict the use of a person’s credit history in making employment decisions. Called the Job Applicant Fairness Act, the bill would outlaw using a credit report to deny a job to an applicant, or to discharge an employee. This issue has gotten a lot of attention lately. Since many people have lost their jobs in the last couple of years, their credit ratings may have suffered. A foreclosure or late credit card payments can be directly tied to a layoff, and do not measure a person’s aptitude for a job. In addition, it is widely believed that making employment decisions based on a credit score affects minority candidates more harshly.
The counter argument is that a person with debt pressures is more likely to embezzle. It seems that all people could use more money; a past history of theft is a better indicator of thieving tendencies than someone who has tried and failed to stay current with obligations.
Still, in case there is any validity to the fear that people with poor credit are a danger to client’s money, financial institutions are given some leeway. The bill introduced into the General Assembly gives exceptions in several circumstances, such as when the person is applying for work at a bank whose deposits are insured by a federal agency, someone registered as an investment advisor with the SEC, or if some law requires the employer to consider the applicant’s credit history. In addition, if the person has been given an offer of employment, and the credit report is needed for a reasons other than denying employment, discharging the person, or determining pay or other terms of employment, the employer may request it. Presumably such reasons are related to jobs in which the person has the largest opportunity to embezzle.