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Texas House Committee Hears Bill Prohibiting Use of Credit Reports in Hiring
Thursday, May 7, 2015 6:50 AM

The Business and Industry committee of the Texas House held a public hearing and took testimony on HB 1515 by Rep. Terry Canales (D-Edinburg) that seeks to prevent employers from acquiring or seeking a credit report on potential employees as part of the hiring process. The bill prohibits an employer from using a credit report in any employment context.

This would prohibit credit unions, as an employer, from pulling a credit report on an applicant for a job, or for checking on credit during employment. Rep. Canales is working with the Texas Credit Union Association and the other financial institution groups on an amendment that would provide an exception for financial institutions. The amendment would allow financial institutions to continue to use credit reports during the hiring process.

Michael Cowles, of the Equal Justice Center, testified against the bill. He said credit reports have not been shown to provide better-performing workers. He also said the practice has become more widespread and can be found occurring at job opportunities that are not specifically related to the credit report. 

Eric Ellman of the Consumer Data Industry Association testified against the bill. Ellman defended the practice, saying it is specifically job related. He also said potential employees are given many opportunities to explain any issues that may arise during a credit report, and most with a low credit score still obtain a job regardless. 

Current federal law permits the use of credit reports in the employment context, but requires the employer to provide notice to the applicant, and to obtain consent first.

The bill was left pending.

Contact Jeff Huffman, president, Texas Credit Union Association at 469-385-6488 or for more information.