Senator Elizabeth Warren of Massachusetts and Representative Steve Cohen of Tennessee reintroduced legislation aimed at banning employers from using credit reports when making hiring decisions. The move comes as U.S. workers face increasing pressure in a slowing labor market.
The Equal Employment for All Act Returns
The bill, known as the Equal Employment for All Act, would amend the Fair Credit Reporting Act to prohibit employers from requiring applicants to disclose their credit history. It also bans consumer reporting agencies from providing credit reports to employers and blocks hiring managers from disqualifying candidates based on credit information.
Warren: Credit History Should Not Determine Jobs
“Nobody should be discriminated against and miss out on a job opportunity because of their financial history,” Warren said in a statement. She added that while economic conditions remain challenging, blocking workers from jobs over poor credit is both unfair and counterproductive.
Cohen: Credit Scores Are Misleading
Representative Steve Cohen echoed Warren’s argument, saying that credit reports are “an inaccurate way to predict future job performance or ability.” He argued that employment should be about qualifications, not a financial snapshot that often reflects medical debt or past unemployment.
Half of Employers Use Credit Reports Despite No Proven Benefit
A 2023 Urban Institute report found that nearly half of employers incorporate credit history into their hiring process. Yet research shows no meaningful correlation between a person’s credit score and their ability to perform on the job.
Disproportionate Harm to Minorities and Women
According to Warren’s office, credit-based hiring disproportionately affects people of color and women. Women are more likely to have poor credit due to caregiving responsibilities and wage disparities, while minority populations face systemic barriers that leave them more exposed to financial hardship.
Medical Debt Often the Culprit
Many Americans’ credit issues stem not from financial irresponsibility, but from unexpected medical bills or extended job losses. Critics argue that punishing applicants for these circumstances only locks them out of the very jobs they need to regain stability.
Echoes of the 2008 Financial Crisis
The push to restrict credit checks in hiring gained momentum after the 2008–09 recession, when millions saw their credit scores plummet due to lost jobs and collapsing home values. Despite that, employer reliance on credit checks has continued for more than a decade.
Patchwork of State Bans Already in Place
Several states; including California, Colorado, Hawaii, Illinois, Nevada, Oregon, and Washington; have passed laws restricting or banning employer credit checks, with certain exemptions for security-sensitive positions.
New York City implemented a ban in 2015, and lawmakers there are now considering a statewide version.
Why a Federal Ban Could Matter More
Supporters argue that national legislation is needed to create consistency across industries and regions. Without it, workers in some states remain vulnerable to hiring discrimination based on credit history, while others enjoy stronger protections.
Critics Say Employers Need Flexibility
Business groups have previously argued that credit scores can be a useful tool for positions involving financial responsibility. However, opponents counter that skills and background checks already provide adequate safeguards without penalizing workers for past financial struggles.
A Fairer Job Market or Just Political Theater?
While Democrats frame the bill as a fairness measure, Republicans are likely to resist another expansion of federal regulation.
With the labor market slowing, the political debate could sharpen over whether Congress should focus on protecting workers or on giving employers more discretion in hiring.
What Comes Next in Washington
Versions of this legislation have been introduced for years but have failed to advance.
Whether Warren and Cohen’s renewed push gains momentum in 2025 remains uncertain, especially with partisan divides over labor policy running deep.
A Larger Question About Employment Equity
Senator Warren’s press release states the legislation is endorsed by: Americans for Financial Reform, Bazelon Center for Mental Health Law, Consumer Action, Disability Rights Education and Defense Fund, National Consumer Law Center (on behalf of low income clients), National Employment Law Project, National Employment Lawyers Association, Unidos, New York Legal Assistance Group, National Black Justice Coalition, Job Opportunity Task Force, Public Citizen, and the National Association of Consumer Advocates.
At its core, the bill raises a broader question: should financial history be allowed to dictate job opportunities in America?
For millions struggling with debt or financial recovery, the answer could shape their ability to re-enter the workforce.
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Trump’s $25,000 ‘No Tax on Tips’ Deduction Covers Bartenders, Babysitters and 66 More Jobs
President Donald Trump’s “big beautiful bill” has made waves with a new tax break: a “no tax on tips” deduction worth up to $25,000 per year. The U.S. Treasury has now released a preliminary list of 68 jobs that may qualify. The deduction runs from 2025 through 2028 and could reshape the financial outlook for millions of service workers. But it also comes with strict limits, phase-outs, and unanswered questions.
Trump’s $25,000 ‘No Tax on Tips’ Deduction Covers Bartenders, Babysitters and 66 More Jobs
Treasury I Bond Rates Increases from 3.11% to 3.98% – But with a 1.1% Fixed Rate Locked for 30 Years, Is It Still a Smart Investment?
Inflation has become a significant concern. During the past three years of surging inflation, I bonds offered a safe and attractive investment option. However, with recent lower CPI numbers, the current composite rate for I bonds bought after May 1, 2025 will be 3.98%. The rate has slightly increased from the prior 3.11% but is a sharp decline from the enticing 9.62% annual rate available in May 2022 or even the 4.28% available for bonds purchased before October 31st, 2024. As rates decrease, investors are now considering whether it’s still worth buying Series I bonds.
Treasury I Bond Rates Increase from 3.11% to 3.98% — But with a 1.1% Fixed Rate Locked for 30 Years, Is It Still a Smart Investment?
Retirees in These 9 States Still Face Social Security Taxes—While 3 Finally Got Relief For 2024
While many envision tax-friendly golden years, residents in nine states face a harsh reality as their Social Security benefits are taxed. In contrast, three states ended their practice of taxing these benefits for the 2024 calendar year. This shift highlights the complexities of retirement planning in the U.S. and underscores the importance of staying informed about changing tax laws. Are you living in one of these states? Discover how these tax changes might impact your retirement strategy and whether it’s time to reconsider your locale for those serene post-work years.
Retirees in These 9 States Still Face Social Security Taxes—While 3 Finally Got Relief For 2024
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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