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Bill limiting credit checks by employers approved

ANNAPOLIS — The General Assembly passed legislation Wednesday that would limit businesses’ ability to use the credit histories of job applicants in making hiring decisions.

The House of Delegates approved SB 132 on a 90-46 vote and the Senate voted 33-13 on twin legislation, HB 87.

Sen. Catherine E. Pugh, D-Baltimore City, said technical amendments tacked on to the bills by both chambers made them identical, meaning routine concurrence votes on both are all that stands between the legislation and the governor’s desk.

“I think it’ll make a difference for a lot of people,” said Pugh, who sponsored the Senate legislation. “In these economic times, we’ve seen so many people in foreclosure, so many people struggling, so many people looking for jobs. And to remove that barrier from the application process, I think that will help a lot of people.”

Similar credit check legislation failed last year under heavy lobbying from business interests in Annapolis that view credit histories as one of the few concrete pieces of information they can obtain about prospective employees.

Those concerns lingered this year when the new legislation was introduced, but a deal reached in early March softened most of the opposition.

The compromise bills would allow for the use of credit checks by federally insured financial institutions and investment advisors, and companies that are hiring for managerial jobs, jobs that have expense accounts or corporate credit cards, and positions that have fiduciary responsibilities or access to trade secrets or personal information.

The penalty provision was a key sticking point. The original legislation would have allowed people to take employers to court if the employers improperly used their credit histories.

The fines in the compromise — $500 for the first violation and $5,000 for subsequent violations — would be paid to the person whose credit history was misused and would be eligible for an administrative appeal. Concerns remained among many conservative lawmakers about limiting the tools available to businesses expanding their workforces at a time when job creation is a critical to the state. But, supporters argued credit histories aren’t an accurate predictor of future on-the-job performance for most workers.

“Credit does not dictate one’s character,” Pugh said.

One comment

  1. YAY!!!! Now if we can Ban the Criminal History Box on the inital job application and Put limits on who can see the MD Judiciary Website…Maryland would be the most popular and forward thinking State in the Union!! YAY OMALLY!!!