Employment/Credit Score “Vicious Circle” Bill Up Today

In the Senate Judiciary Committee today, the main event up for debate is Senate Bill 12-003–sponsored by Sen. Morgan Carroll, from the summary text:

The bill creates the “Employment Opportunity Act”, which specifies the purposes for which consumer credit information (i.e., consumer credit reports and credit scores) can be used by an employer or potential employer (jointly referred to as “employer”). Specifically, the bill:

Prohibits an employer’s use of consumer credit information for employment purposes if the information is unrelated to the job;

Requires an employer to disclose to an employee or applicant for employment (jointly, “employee”) when the employer uses the employee’s consumer credit information to take adverse action against him or her and the particular credit information upon which the employer relied;

Authorizes an employee aggrieved by a violation of the above provisions to bring suit for an injunction, damages, or both; and

Requires the department of labor and employment to enforce the laws related to employer use of consumer credit information.

This bill is based on the premise that many people who lose their jobs, as has happened a great deal in the last few years, encounter temporary financial problems as a direct result that can impact their credit rating. Since credit scoring is often a major criteria used by human resources departments to judge an applicant’s reliability or trustworthiness, people in the job market  can find themselves in a “vicious circle” of poor credit denying them job opportunities: which in turn denies them the ability to repair their credit. At best, it’s a trap set by well-meaning HR people who never bothered to think of a way for people to escape it–not to mention erroneous data.

This isn’t the first time that Sen. Carroll has run this bill, which has met Republican opposition for the usual “don’t tie the hands of business” reasons–but there are now more people out there looking for work as the economy recovers who would benefit. This is also one of the bills we’ve seen over the years that sounds right up the alley of a Democratic-controlled Senate…until a fellow Democrat mysteriously appears out of nowhere to kill it (see: payday lending reform).

So we suppose you’d better watch out for that, too.

34 Community Comments, Facebook Comments

  1. that Amercans must contend with on a regular basis, TSA perhaps, that is more intrusive, abusive, and of specious value than credit scoring.

    The entire concept, that what was once a fairly objective and relatively understandable analysis of a borrowers, income, cash flow, and willingness to repay an obligation, — can be distilled down into a single quickly obtained computer generated number (using a top secret algorithm that no one can fully reveal or even explain) is of highly questionable value for even its purported credit granting purposes.  I’m not convinced that this scam should even be legal for lending purposes.  Fair-Isaacs knows how to sell, and how to lobby, but they really are just tossing darts when it comes to figuring out who can, or will, repay a debt.

    Employers would be better served by some online dating service’s compatibility-quotient for selecting employees than a credit score.  

    • ArapaGOPArapaGOP says:

      Credit reports are a check against the honesty of the applicant, and valuable information for employers. A good job candidate will get hired anyway and will be up front if they have negative credit, and employers can already get much more personal information anyway (i.e. drug test).

      Deadbeats don’t need protection, people who pay their bills on time need protection from deadbeats.

      • Fidel's dirt nap says:

        because Bain couldn’t pay their bills.  Fucking deadbeats !

      • notice anywhere that I said anything against credit reports?  You don’t know the difference between credit scoring and credit reporting?  How about your head and your ass?

        • ArapaGOPArapaGOP says:

          As an employer, you don’t get to see credit scores. You only see an employer’s credit report with listed debts, not the scores.

          Everybody on this blog is so ready to charge ahead with their facts. It burns you…

      • Ralphie says:

        People with poor credit don’t need protection.

        They need payday loans.

      • DavidThi808DavidThi808 says:

        I never saw why this is of any value. I don’t care if someone does a lousy job of managing their personal finances, I just care if they can perform their job. And how does honesty relate to a credit score?

        • RedGreenRedGreen says:

          You are the most compassionate, wisest employer in Colorado. If only cloning were legal and practical. If only …

          • BlueCat says:

            smirking while typing this, would you?

            • RedGreenRedGreen says:

              Because that was exactly the point I was making! Nailed it again!

            • BlueCat says:

              what it is about your self congratulatory posts that make snarky responses so irresistible, nobody will ever be able to explain it to you.

              • Fidel's dirt nap says:

                you’re ruining it !  : )

              • DavidThi808DavidThi808 says:

                I figured there is value in being able to counter Republican talking points by speaking as a business owner. But by definition those are self referential.

                • RedGreenRedGreen says:

                  Do self-referential and self-congratulatory really mean the same thing? Really?

                  • DavidThi808DavidThi808 says:

                    How would you have phrased it?

                    • BlueCat says:

                      It’s not that you are unique in referencing your own experiences.  It’s that, in referencing them, you rarely (virtually never) miss the opportunity to do so in the context of patting yourself on the back (that would be the self congratulatory part) for being so darned terrific and setting forth yourself and yours as the perfect lens through which absolutely everything ought to be viewed, you being the perfect altruist, the perfect employer and your business and personal practices being the perfect example the world should follow, your solutions the solutions to every conceivable eventuality.  

                      On rare occasions it’s not about you. It’s about your great mom or great kids. That’s what causes the eye rolling and brings out the snark. Maybe if you could try for self referential that wasn’t quite so self reverential?

                    • DavidThi808DavidThi808 says:

                      Can you tell me specifically how I could have better spoken to this comment.  

                    • BlueCat says:

                      It’s not about any one comment in isolation. It’s a cumulative thing. Never mind. It’s hopeless. I give up.  

                    • RedGreenRedGreen says:

                      But David is right to be puzzled about the hive mind response (which I share!) regarding this particular comment. My original crack only makes sense if you’re familiar with David’s oeuvre … in isolation, what he said above was self-referential, not -reverential, and I don’t see any way to have phrased it better.

                    • BlueCat says:

                      It’s the cumulative that sets us off and makes it so hard for us to respond fairly to a particular comment like this instead of having a kind of knee jerk snarky response. Honest, I was trying to be helpful.

                    • DavidThi808DavidThi808 says:

                      Not much we can do about that as it provides no specifics.

                      If all you tell me is you don’t like my tone, there’s not much I can do about that. Especially as I’ve changed it (at least I think so) recently.

                      If you truly are interested in being helpful, and I think you are, please provide specifics.

                    • BlueCat says:

                      So many of your comments include blatant bragging, smug patting your own back for the wonderful things you are accomplishing and an assumption that everything that works in your little corner of the universe, for you, in your particular business is universally applicable.

                      It gets pretty funny.  It triggers the eye rolling, skip straight to snark response in many of us. I don’t know how to be more clear. Maybe pull up a months worth of your comments and look at them and try to imagine somebody who isn’t you reading them with your constant reports of how great you and your business and your kids and mom are doing due to your own and everyone in your circle’s general wonderfulness, how lucky your employees are to have wonderful you for a boss and how wonderful everything would be for everyone if we  would only follow your wonderful example.

                      Sorry.  That’s the best I can do.  

                    • RedGreenRedGreen says:

                      Plus, you should watch out with all those “Republicans vote Wednesday!” posts — that could land you in jail soon.

                    • DavidThi808DavidThi808 says:

                      Because I don’t see how the comment I made that triggered your snark fits the above points.

                      And yes I am proud of my kids, my mom, and that I provide good jobs for a number of people. But I took a look at recent comments and didn’t see anything that would constitute bragging.

                      So again, I’m open to suggestions. But something concrete would sure help. Where you point to a specific comment with a suggestion of how you think it should have been worded.

                      Because all I’ve got from this is “write different.”

                    • RedGreenRedGreen says:

                       is fine. BlueCat rightly notes that all the rest easily come to mind, though, thus finishing the joke.  

                    • BlueCat says:

                      How many times do I have to say it’s not about this particular comment? You often seem puzzled by the snarky reactions you get so I thought I’d try to convey to you why that might be. If it makes no sense to you or if you completely disagree, that’s your prerogative. If you think I’m completely wrong, you certainly may be right about that.  The one thing I don’t get at all is how it is you can say that all you get from my remarks is “write different” but that being the case, I surrender. Good night, Dave.

      • BlueCat says:

        So everyone who can’t pay their bills because they lost their job is deadbeat? Everyone who can’t pay their bills because they lost their insurance and got sick or their child or spouse got sick is a deadbeat? No wonder you love Mr. I Don’t Care About The Very Poor And I Wouldn’t Stoop To Pick Up A Mere 400K Romney.  

        Of course, when it comes to poor Doug Bruce, your compassion knows no bounds and I’m sure you think you’re a terrific family values Christian to boot. Yeah I’m sure Jesus would be all for crapping all over people who have fallen on hard times because the vulture capitalists blew up the economy and absconded with all the money.

        You seriously have the nerve to call anyone else a hypocrite? Wow!


  2. Say Hey Kid says:

    Did it pass out of Committee or was it killed?

  3. Craig says:

    This stuff is all already provided by Federal law.  Employers have been prevented by discrimination laws for years from inquiring into credit items unless there is a relationship to the job.  Same with notifying someone denied employment because of a credit report.

    So, all this does is give employees another avenue which they don’t need and will only overburden the courts.

    I hear she is also on the HOA front again.  UGH.  What are the results of her previous bills.  I can tell you this, the only thing they have really done is make richer attorneys (myself included) richer.  They haven’t reduced complaints.  There weren’t that many before.  As I understand it the new agency she created got something like 500 complaints.  Out of 2M residents in HOA’s that is nothing.  It has always been nothing.  What Sen. Carroll has refused to understand since the beginning of this exercise in HOA regulation is that there are two real problems with HOAs.  First, they are political, and like Republicans who whine about everything, there are some homeowners who just don’t belong in an HOA and shouldn’t live there.  These people are in the minority and, I’m sorry, but if they didn’t read the Declaration, Bylaws and Rules before buying, they have no one to blame but themselves.  They should go and live in Sen. Morgan’s District (where I grew up) or some other place where there aren’t HOA’s.  Second, if she wants to solve most of the complaints with HOA’s, she should simply limit attorneys’ fees to the amount of the debt owed and take away the right of associations to fine members.  If attorneys couldn’t make any money, you wouldn’t see any of these ridiculous things where attorneys charge 10 times the debt for collecting it.  If HOA Boards had to choose between working something out and going to court (the only thing they could do if fines weren’t allowed) then things would get settled much quicker.

    These two things are why I think Sen. Morgan is one of the worst.  Solutions seeking problems.  Legislation which is duplicative and won’t solve real problems.

    • raymond1 says:

      Employers have been prevented by discrimination laws for years from … notifying someone denied employment because of a credit report.

      No: it’s perfectly legal to deny someone employment because of a credit report — subject only to possibel, but almost never-filed, “disparate impact discrimination” claims by black/latino workers.

      Employers have been prevented by discrimination laws for years from inquiring into credit items unless there is a relationship to the job.

      Yes, technically a credit screening with a disparate racial impact is impermissible unless highly job-related — but (a) no white employees have a claim against that practice, and (b) in reality, the % of employers doing this has risen from 35% to 60%, for all kinds of jobs, in the past decade. The reality is that it’s extremely hard to prove and litigate a disparate impact claim — you need to spend a ton on statistical experts, the claims take forever to litigate, etc. — which is why they’re almost never filed, which is why (in turn) employers are free to keep screening out applicants with blemishes on their credit history.

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