Bill banning job credit checks passes House

A bill that prohibits Illinois employers from considering employee’s credit scores in hiring and firing decisions was passed by the House on Thursday but some question whether it’s needed.

The Employer Credit Privacy Act, which was introduced by Rep. Jack D. Franks, D-Marengo, and is being considered in the Senate, would ban companies from asking for or using a current or prospective employee’s credit history to determine employment status.

“This is one less impediment for people to get back on their feet,” Franks said. “Why do you need to check credit for somebody that is driving a truck, sitting behind a desk or pounding a nail?”

With the latest reported unemployment rate in McHenry County at 11.6 percent, the
number of people with bad credit is on the rise in a big way, said Virginia Peschke, executive director of the Consumer Credit Counseling Service of McHenry County.

“We’re seeing people give up on repaying their credit cards and unsecured debt while they are unemployed,” she said.

During the hiring process job seekers are often asked a lot of things that seem inappropriate, said Beth Nickels-Wisdom, co-moderator of the Crystal Lake Job Club, adding someone she knows was asked if his family was using food stamps on a job application.

Though the bill would ban credit history as a factor in employment, it would allow exemptions for certain companies, such as those in the banking or financial industry or state law enforcement agencies.    

Forty-seven percent of employers said they run credit checks for certain positions, according to a 2009 survey by the Society for Human Resource Management, though only 13 percent do it for all candidates.

But not everyone is convinced the bill would make any significant changes.

This measure is not significantly different from the federal law that already exists, said Karla Dobbeck, president of Human Resources Techniques in Algonquin.

“Businesses have had to comply with the Fair Credit Reporting Act since 1997,” she said, which requires businesses to gain the applicant’s consent to run a credit check and then give them the chance to explain unfavorable information.

“I don’t think it will have much effect,” she said.

Frank disagrees.

The bill will “certainly help the unemployment rate,” he said.  “This bill will at least allow people who are qualified for jobs a fighting chance.”

Similar bills have passed in Hawaii and Washington and are under consideration in other states.

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