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Old 05-01-2013, 07:36 PM
Rachellelogram Rachellelogram is offline
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When are pre-employment credit checks legal in New York?

I'm asking this question out of curiosity and a desire to fight my own ignorance, not out of any desire to file a lawsuit or hire an actual lawyer. No posts in this thread are to be construed as actual legal advice. You are not my attorney (although you are darn good-lookin'!), and I am not your client. Now that's out of the way:

I'm emphatically not a legal type. From the googling I've done, there appears to be a New York state law that prevents the use of credit checks to determine candidate eligibility as part of pre-employment background checks, unless a "reasonable nexus" exists. What does this mean? Any case studies or past precedent, or something I can read over to better understand what jobs this phrase applies to? The wording seems pretty ambiguous as-is. Does it mean that applicants for a minimum-wage cashier job may be subject to pre-employment credit checking, because they'd be handling money on a daily basis? Does it apply to any job in the financial sector? What about jobs with access to sensitive (but not necessarily financial) customer information? Or is it only meant to include high-level managers and executives in charge of major financial transactions?

I'm asking because I recently applied for a job at a bank in New York. I'm just wondering if it's possible to know whether or not it's legal for them to check my credit. What jobs are included in/excluded from this law?

I welcome any and all attorney opinions, personal experience, wild-arsed guesses, and pure speculation with open arms. Thanks!

Last edited by Rachellelogram; 05-01-2013 at 07:38 PM..
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Old 05-01-2013, 09:50 PM
Duckster Duckster is offline
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Quote:
Originally Posted by Rachellelogram View Post
I'm asking because I recently applied for a job at a bank in New York. I'm just wondering if it's possible to know whether or not it's legal for them to check my credit. What jobs are included in/excluded from this law?
Under the Fair Credit Reporting Act, they must have your permission to run a credit check on you. Did you give them permission in writing?
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Old 05-01-2013, 10:28 PM
msmith537 msmith537 is offline
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"reasonable nexus" would generally be any job in financial services. Not just management positions. The justification is that bad credit may indicate personal financial stress. And that may lead to you using privileged financial information to commit some sort of fraud, insider trading or other activity that conflicts with the interests of the bank.

I've worked for two insurance companies and two Big-4 accounting /consulting firms and my wife works for a rating agency. They are pretty big on background checks, compliance conflicts (ie your personal stock holdings), sometimes even drug tests.
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Old 05-02-2013, 12:42 PM
Rachellelogram Rachellelogram is offline
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Originally Posted by Duckster View Post
Under the Fair Credit Reporting Act, they must have your permission to run a credit check on you. Did you give them permission in writing?
I did sign a generic release authorizing them to check my background, including criminal history, references, and credit. But, if I may get pedantic, that doesn't mean that it's necessarily legal for them to check every applicant's credit, nor that they plan to obtain or use that information for me specifically. For all I know, perhaps they request everyone sign the same generic form, from tellers to VPs. At no point in my communication with the company (including emails, phone conversations, and a Skype interview) has a credit check been mentioned. I currently have a job offer that is contingent, in the words of the HR lady, on my criminal background check and my references.

I suppose I could just ask them if they're using credit history to determine my eligibility for employment. But I don't want to bring it up, since my credit is mediocre. Such a question could only hurt me, and mere curiosity isn't worth losing the job offer!
Quote:
Originally Posted by msmith537 View Post
"reasonable nexus" would generally be any job in financial services. Not just management positions. The justification is that bad credit may indicate personal financial stress. And that may lead to you using privileged financial information to commit some sort of fraud, insider trading or other activity that conflicts with the interests of the bank.

I've worked for two insurance companies and two Big-4 accounting /consulting firms and my wife works for a rating agency. They are pretty big on background checks, compliance conflicts (ie your personal stock holdings), sometimes even drug tests.
The job I'm jockeying for is taking tech support calls in their call center (password resets, which links to click to accomplish x, etc). I'm likely to have access to sensitive information. However, there's no cash handling. And I'm unlikely to have the ability to shuffle funds between accounts (although I don't yet know how their system is set up).

I currently work for an insurance company in the upper quartile of the Fortune 500. I don't know for certain whether they did a pre-employment credit check, but I wouldn't be surprised. There are some laws against credit checks here (Illinois) now, but I got the job in 2008--I'm pretty sure those laws weren't on the books back then. And even then, I'm guessing (not having read the law here, but just spitballing) that an insurance job would probably have a "reasonable nexus" anyway.

Off-topic, but there's no drug testing here except for drivers--there's a parking lot shuttle at our home office. I can't think of any other job it would apply to. Not that it matters to me personally, since I don't consume anything but caffeine/nicotine/alcohol. But I think a lack of drug testing implies higher levels of employee trust, which is conducive to a better work environment.
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