Does A Job Applicant’s Credit History Matter?
New York City is about to impose restrictions on employers that will help answer this question.
Last Thursday the City Council passed by a 47-3 vote legislation that bars employees from requesting or using for employment purposes the consumer credit history of an applicant for employment or otherwise discriminating against an applicant or employee “with regard to hiring, compensation, or the terms, conditions or privileges of employment based on the consumer credit history of the applicant or employee “
“Surly there must be an exception for the financial services industry?” you say. After all we are talking about the capital of world finance where unethical financial gurus can hide billions of dollars easier than I misplace my cell phone.
Not really. The prohibition against credit reports does not apply to an “employee having signatory authority over third-party funds or assets valued at $10,000 or more; or that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.”
Since there is no categorical exception for banks and credit unions those of you in the city seeking to utilize this exception will have to parse the quoted language on a case-by-case basis. I would suggest it is worth doing so only for the most senior positions with the most direct control over your credit union
Another exception applies to a position “with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employers or client’s networks or databases.”
This does seem broad enough to cover a good portion of but not all of your I.T. staff but it is also vague enough to raise some troubling questions. For example, does the exception apply to persons whose duties authorize them to modify data security networks, or, more broadly, to individuals whose jobs enable them to access sensitive computer networks? If the narrower definition applies than you won’t be allowed to do credit checks on the Edward Snowden wannabes of the world who have no compunction against gaining unauthorized access to employer systems.
If you’re saying to yourself that, since you live outside of the Big Apple, you don’t have to worry about this measure you are wrong. Similar bills are already floating around the state legislature and the support for this measure will provide a real push to getting a similar measure approved on the state level.
Supporters of this proposal argue that credit checks don’t have any kind of direct relationship to a person’s competency. Over the last eight years many people have had their credit battered by flat wages and layoffs having nothing to do with how well they do their job. I get that. But at the end of the day, when you work for a bank or a credit union, you do take on an added obligation to handle money properly whether you are a teller, branch manager or a CEO. Credit unions should be able to decide for themselves what they need to know when evaluating applicants free of government micro managing. Here is a copy of the bill which is awaiting the Mayor’s signature. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1709692&GUID=61CC4810-E9ED-4F16-A765-FD1D190CEE6C
Cyber Sharing Bill passes House
A strange thing is happening in the House of Representatives: It’s starting to pass substantive bills with bipartisan support. Is our long national nightmare of legislative ineptitude coming to an end?
Yesterday, the House passed HR 1560 which extends liability protections to businesses that voluntarily share cyber threat information. The legislation positions the government as a central clearinghouse for cyber threats.
The bill is consistent with a growing shift in emphasis away from cyber threat prevention and towards more quickly responding to cyber-attacks after they occur. (Your credit union will be subject to a data breach; the question is how quickly will you spot it?) The quicker a network of potential targets can talk to each other the quicker they can respond to data breaches. Here is a copy of the bill which has not yet been passed by the Senate. http://thomas.loc.gov/cgi-bin/query/F?c114:2:./temp/~c114VL7VIk:e2869: