Sen. Elizabeth WarrenElizabeth WarrenOvernight Finance: Senate sends Puerto Rico bill to Obama | Treasury, lawmakers to meet on tax rules | Obama hits Trump on NAFTA | Fed approves most banks' capital plans The Trail 2016: When a pivot isn’t always a pivot Overnight Tech: Facebook's changes worry publishers | First stage of spectrum auction ends | Clinton recruits from Silicon Valley MORE (D-Mass.) on Tuesday proposed legislation to prevent companies from using a person's credit history as a factor in the hiring process, a practice that Warren says makes it harder for poor people to land a job.
"A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual's character or abilities," Warren said. "Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs.
Warren's Equal Employment for All Act amends the Fair Credit Reporting Act to prevent prospective employers from using consumer credit reports as a basis for making hiring decisions. It also blocks companies from using credit checks as a basis for decisions related to current employees.
Warren said studies have shown that there is no correlation between a poor credit history and the ability of a person to do a job well.
"It makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and that can be riddled with inaccuracies," she said.
However, the bill does make a key exception, indicating that poor credit could pose other risks. Warren's bill says employers may continue to consider credit scores as a factor when hiring people for positions that require a national security clearance.
Warren said her bill is based on a House bill that Rep. Steve Cohen (D-Tenn.) proposed in 2011. The new Senate version is sponsored by Sens. Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Patrick Leahy (D-Vt.), Ed Markey (D-Mass.), Jeanne Shaheen (D-N.H.) and Sheldon Whitehouse (D-R.I.).