Bumpy Road for Bill to Ban Credit Checks for Job Applicants

MARCH 29, 2015

For nearly a year now, advocates for struggling New Yorkers have argued that the stars were aligned for passage of a powerful pro-worker statute: A law that would prohibit employers from denying jobs to applicants with poor credit histories.

Mayor Bill de Blasio voiced support for a ban, though he signaled he might consider exemptions. City Councilman Brad Lander, a Brooklyn Democrat, helped persuade a majority of his colleagues to support a bill that he said would not be “riddled with loopholes.” And last month, Melissa Mark-Viverito, the Council’s speaker, described the bill as one of her top legislative priorities.

Then came closed-door negotiations this month. And guess what? It turned out that employers were not the only ones pressing for exemptions. The de Blasio administration wants to continue using credit checks in the hiring of police officers and fire marshals, for example, and supports other exemptions favored by the business community to ensure what city officials have described as “good, rational policy.”
Concerns from advocates about changes in the scope of the exemptions delayed a vote on the bill, which some supporters had hoped would pass this week. Talks are continuing and officials say an agreement remains within reach. But some advocates describe the back-and-forth as sobering.

“To the degree that we thought it would be easier for it to happen here given the progressive leadership, that’s not true,” said Emmanuel Caicedo, the senior campaign strategist for Demos, a left-leaning public policy group that champions the credit check law along with other nonprofits. “It’s still an uphill struggle.”

Welcome to policy making in the de Blasio era. The mayor takes pride in his liberal agenda and the concrete steps he has taken to improve the lives of ordinary working people. But he has also displayed a pragmatic streak that has pleasantly surprised some business leaders while unsettling some allies on the left.

Remember his expansion of the living wage law? Mr. de Blasio originally wanted to eliminate all but three loopholes in that law, which requires companies that receive more than $1 million in city subsidies to pay workers more than minimum wage. But in the end, he offered more exemptions and covered fewer industries than planned.

The mayor’s aides said his thinking on the living wage evolved as he and his team dug more deeply into city subsidy data. And in considering the credit check law, city officials started suggesting months ago that they wanted to hear from all sides — employers and workers, advocates and council members — to try to work out a common-sense approach that might well include some exemptions.

Mr. Lander pointed to a 2010 study by the Society for Human Resource Management that found that 60 percent of the firms surveyed relied on credit checks in hiring. (In New York City, credit checks are even sometimes used to screen dog walkers and janitors.) Employers say the checks are necessary at a time when identity theft and cybercrimes are rife, but advocates say they disproportionately harm blacks and Hispanics without accurately predicting fraud or poor job performance.

Maya Wiley, the mayor’s general counsel, told the City Council in September that the administration wanted to “make sure that we’re hearing from all quarters of New York’s residents and businesses so that we understand the impact, so that we’re making good, rational choices.”

Mr. Lander said last week that he had been persuaded that some exemptions were sensible. (One proposed exemption allows for credit checks of prospective employees who would have signing power over assets valued at $10,000 or more, for instance.) And he emphasized that the law would never have come this close to the finish line under the previous mayor and speaker.

“I think it makes a lot of sense to take a very strong step forward that covers the overwhelming majority of jobs in New York that has some reasonable exemptions,” said Mr. Lander, the chief sponsor of the bill, who remained optimistic that the city would still pass the strongest law in the country.

Mr. Lander said that he had rejected sweeping carve-outs favored by employers that would have allowed financial institutions, private colleges and car dealers to deny jobs to applicants with poor credit scores.

But some advocates complain that deep-pocketed executives are still exerting more influence than they had expected under Mr. de Blasio. Last month, the Partnership for New York City, a powerful coalition of business leaders, wrote to the mayor and the City Council complaining that Mr. Lander and other sponsors of the credit check legislation were refusing to budge on exemptions.

Within weeks, city officials, City Council members, business leaders and advocates were in talks to try to come up with a deal. Last week’s draft of the bill, addressing concerns raised by the Partnership for New York City, allows companies to use credit checks to screen applicants who would have access to trade secrets and digital networks or databases, for example. Some supporters of the law say that language is overly broad.

Kathryn S. Wylde, the president of the Partnership, laughed when told that some advocates argued that her coalition has had too much influence over the shaping of the bill.

She said that anyone who thought the organization would stand on the legislative sidelines under this mayor, or any other, was sorely mistaken.

“Welcome to the real world,” Ms. Wylde said.