[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING ON H.R. 3149,
THE EQUAL EMPLOYMENT FOR ALL ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS
AND CONSUMER CREDIT
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 23, 2010
__________
Printed for the use of the Committee on Financial Services
Serial No. 111-159
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62-684 PDF WASHINGTON : 2010
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HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama
MAXINE WATERS, California MICHAEL N. CASTLE, Delaware
CAROLYN B. MALONEY, New York PETER T. KING, New York
LUIS V. GUTIERREZ, Illinois EDWARD R. ROYCE, California
NYDIA M. VELAZQUEZ, New York FRANK D. LUCAS, Oklahoma
MELVIN L. WATT, North Carolina RON PAUL, Texas
GARY L. ACKERMAN, New York DONALD A. MANZULLO, Illinois
BRAD SHERMAN, California WALTER B. JONES, Jr., North
GREGORY W. MEEKS, New York Carolina
DENNIS MOORE, Kansas JUDY BIGGERT, Illinois
MICHAEL E. CAPUANO, Massachusetts GARY G. MILLER, California
RUBEN HINOJOSA, Texas SHELLEY MOORE CAPITO, West
WM. LACY CLAY, Missouri Virginia
CAROLYN McCARTHY, New York JEB HENSARLING, Texas
JOE BACA, California SCOTT GARRETT, New Jersey
STEPHEN F. LYNCH, Massachusetts J. GRESHAM BARRETT, South Carolina
BRAD MILLER, North Carolina JIM GERLACH, Pennsylvania
DAVID SCOTT, Georgia RANDY NEUGEBAUER, Texas
AL GREEN, Texas TOM PRICE, Georgia
EMANUEL CLEAVER, Missouri PATRICK T. McHENRY, North Carolina
MELISSA L. BEAN, Illinois JOHN CAMPBELL, California
GWEN MOORE, Wisconsin ADAM PUTNAM, Florida
PAUL W. HODES, New Hampshire MICHELE BACHMANN, Minnesota
KEITH ELLISON, Minnesota THADDEUS G. McCOTTER, Michigan
RON KLEIN, Florida KEVIN McCARTHY, California
CHARLES A. WILSON, Ohio BILL POSEY, Florida
ED PERLMUTTER, Colorado LYNN JENKINS, Kansas
JOE DONNELLY, Indiana
BILL FOSTER, Illinois
ANDRE CARSON, Indiana
JACKIE SPEIER, California
TRAVIS CHILDERS, Mississippi
WALT MINNICK, Idaho
JOHN ADLER, New Jersey
MARY JO KILROY, Ohio
STEVE DRIEHAUS, Ohio
SUZANNE KOSMAS, Florida
ALAN GRAYSON, Florida
JIM HIMES, Connecticut
GARY PETERS, Michigan
DAN MAFFEI, New York
Jeanne M. Roslanowick, Staff Director and Chief Counsel
Subcommittee on Financial Institutions and Consumer Credit
LUIS V. GUTIERREZ, Illinois, Chairman
CAROLYN B. MALONEY, New York JEB HENSARLING, Texas
MELVIN L. WATT, North Carolina J. GRESHAM BARRETT, South Carolina
GARY L. ACKERMAN, New York MICHAEL N. CASTLE, Delaware
BRAD SHERMAN, California PETER T. KING, New York
DENNIS MOORE, Kansas EDWARD R. ROYCE, California
PAUL E. KANJORSKI, Pennsylvania WALTER B. JONES, Jr., North
MAXINE WATERS, California Carolina
RUBEN HINOJOSA, Texas SHELLEY MOORE CAPITO, West
CAROLYN McCARTHY, New York Virginia
JOE BACA, California SCOTT GARRETT, New Jersey
AL GREEN, Texas JIM GERLACH, Pennsylvania
WM. LACY CLAY, Missouri RANDY NEUGEBAUER, Texas
BRAD MILLER, North Carolina TOM PRICE, Georgia
DAVID SCOTT, Georgia PATRICK T. McHENRY, North Carolina
EMANUEL CLEAVER, Missouri JOHN CAMPBELL, California
MELISSA L. BEAN, Illinois KEVIN McCARTHY, California
PAUL W. HODES, New Hampshire KENNY MARCHANT, Texas
KEITH ELLISON, Minnesota CHRISTOPHER LEE, New York
RON KLEIN, Florida ERIK PAULSEN, Minnesota
CHARLES A. WILSON, Ohio LEONARD LANCE, New Jersey
GREGORY W. MEEKS, New York
BILL FOSTER, Illinois
ED PERLMUTTER, Colorado
JACKIE SPEIER, California
TRAVIS CHILDERS, Mississippi
WALT MINNICK, Idaho
C O N T E N T S
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Page
Hearing held on:
September 23, 2010........................................... 1
Appendix:
September 23, 2010........................................... 41
WITNESSES
Thursday, September 23, 2010
Cohen, Hon. Steve, a Representative in Congress from the State of
Tennessee...................................................... 4
Crawford, Sarah, Senior Counsel, Lawyers' Committee for Civil
Rights Under Law............................................... 9
Denston, Colleen Parker, Director of Human Resources, Worcester
Preparatory School, on behalf of the Society for Human Resource
Management (SHRM).............................................. 17
Gootkind, Judy, Vice President of Finance and Administration,
Creative Services, and Member, Board of Directors, National
Association of Professional Background Screeners (NAPBS)....... 15
Klein, Adam, Partner, Outten & Golden LLP........................ 14
Livingston, Donald R., Partner, Akin Gump Strauss Hauer & Feld
LLP, on behalf of the U.S. Chamber of Commerce................. 13
Shelton, Hilary O., Director, NAACP Washington Bureau............ 19
Wu, Chi Chi, Staff Attorney, National Consumer Law Center (NCLC). 11
APPENDIX
Prepared statements:
Gutierrez, Hon. Luis V....................................... 42
Cohen, Hon. Steve............................................ 47
Crawford, Sarah.............................................. 51
Denston, Colleen Parker...................................... 56
Gootkind, Judy............................................... 63
Klein, Adam.................................................. 71
Livingston, Donald R......................................... 78
Shelton, Hilary O............................................ 83
Wu, Chi Chi.................................................. 86
Additional Material Submitted for the Record
Gutierrez, Hon. Luis:
Demos report entitled, ``Discrediting Workers''.............. 97
Neugebauer, Hon. Randy:
Written statement of the Financial Services Roundtable....... 109
Written statement of the National Federation of Independent
Business (NFIB)............................................ 111
Written statement of various trade associations.............. 113
LEGISLATIVE HEARING ON H.R. 3149,
THE EQUAL EMPLOYMENT FOR ALL ACT
----------
Thursday, September 23, 2010
U.S. House of Representatives,
Subcommittee on Financial Institutions
and Consumer Credit,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2220, Rayburn House Office Building, Hon. Luis V.
Gutierrez [chairman of the subcommittee] presiding.
Members present: Representatives Gutierrez, Watt, Moore of
Kansas, Waters, Baca, Green, Scott, Cleaver; Neugebauer,
Paulsen, and Lance.
Chairman Gutierrez. This hearing of the Subcommittee on
Financial Institutions and Consumer Credit will come to order.
Good morning and thanks to all of the witnesses for agreeing to
appear before the subcommittee today.
Today's hearing will examine H.R. 3149, the Equal
Employment for All Act, introduced by Representative Cohen.
This legislation would prohibit the use of credit reports for
employment purposes with several limited exceptions.
As we will hear today, this is a growing and controversial
use of these reports, and I look forward to the discussion. We
will be limiting opening statements to 10 minutes per side, but
without objection, all members' opening statements will be made
a part of the record.
We may have members who wish to attend but do not sit on
the subcommittee. As they join us, I will offer an unanimous
consent motion for each to sit with the committee and for them
to ask questions as time allows.
I yield myself 5 minutes for an opening statement.
The Equal Employment for All Act was introduced by
Representative Steve Cohen on July 9, 2009, and currently has
55 cosponsors. I am proud to be an original cosponsor of the
bill and have discussed its importance at hearings, briefings,
and townhall meetings. This legislation, if enacted, would be a
significant step forward in eliminating unfair hiring practices
and open up more good jobs to those unemployed Americans who,
aside from a poor credit report, are otherwise qualified to do
these jobs.
H.R. 3149 would amend the Fair Credit Reporting Act to
prohibit an employer from using a consumer report for either
employment purposes or for making an adverse action, including
promotions, transfers and terminations, if the report contains
information that bears upon the consumer's creditworthiness,
credit standing, or credit capacity. This prohibition applies
even if the consumer consents to the use or procurement of a
consumer report for employment purposes or in connection with
an adverse action concerning employment.
The bill provides certain exemptions to this prohibition
that we feel are proper, including jobs that require a national
security or FDIC clearance, jobs with a State or local
governmental agency that specifically require a credit check,
or employment that is at a supervisory, managerial,
professional, or executive level at a financial institution or
is otherwise required by law. This legislation does not
prohibit the use of background screening for a criminal
background, even when it is not required by law.
This subcommittee has held two hearings this year, on March
24th and May 12th, in which we reviewed the methodology, impact
of, and the use of consumer reports under the Fair Credit
Reporting Act and discussed the potential impact of H.R. 3149,
along with other reform proposals. We heard from various
industry representatives, consumer advocates, and others.
More recently, on August 30th, I held a townhall meeting in
Chicago that was attended by hundreds who came from Detroit and
Boston, even as far as Los Angeles and elsewhere, to express
their concerns about the increasingly widespread use of credit
checks for employment purposes. This practice unfairly hurts
the chances of otherwise qualified candidates to get a job.
Credit reports are simply inappropriate for use in most
hiring decisions. An individual's credit history is often
marred by circumstances beyond their control, such as income
loss, medical problems, and the breakup of families, which
often leads to bankruptcy. The Consumer Bankruptcy Project has
estimated that 85 percent of bankruptcies are caused by these
issues and a bankruptcy can have a strongly negative impact on
your credit report. The industry's own studies indicate that
bankruptcy, when noted in a credit report, is something that
potential employers take into account when making employment
decisions.
Along with many others in Congress, I am concerned that
relying upon credit reports will continue to have a harmful
impact on many, especially on communities of color as
minorities have disproportionately worse credit reports even
when income is taken into consideration. No fewer than 8
separate studies in the last 15 years conducted by the Federal
Reserve, the Federal Trade Commission, the Brookings
Institution, and Fair Isaac itself have documented the
disproportionately lower report quality of minorities. The
Equal Employment Opportunity Commission has repeatedly
expressed their concern that the use of credit reports for
employment purposes might violate Title VII of the Civil Rights
Act.
Even if there is no overt bias on the part of an employer
against an applicant based on their credit report, there is the
potential for a subconscious bias against those who have more
negative data on their reports versus those who do not.
You simply cannot tell a person's character, integrity, or
how well they will perform their job by looking exclusively at
their credit report. A credit report should not be one of the
determining factors of whether someone gets a job. The fact
that someone has a credit report that is not superior to
another job candidate does not make them less able to do the
work at an office or factory, nor does it make them more or
less likely to steal from their employer.
Four States, including my own of Illinois, have already
passed legislation at the State level that will ban the
widespread use of credit reports for employment purposes.
Seventeen other States have legislation on this topic coming
before them as well. Congress should act to make these sensible
protections available to all Americans, not just those lucky
enough to live in a State that is willing to protect them from
this practice.
We have heard testimony from the Consumer Data Industry
Association, from Experian, TransUnion, and Equifax, from FICO
and VantageScore and others about how credit reports are
prepared and used. Among other witnesses, today we will hear
from the National Association of Professional Background
Screeners about how its members use, prepare, and provide
background checks and consumer reports to employers. We will
also hear from the Society for Human Resource Management about
how its members use a current or prospective employee's
consumer or credit report to make employment-related decisions.
I welcome and thank these and other witnesses for appearing
with us today.
Now, I call upon the Minority for any opening statement.
Mr. Neugebauer, would you--
Mr. Neugebauer. Thank you, Mr. Chairman, and I will be
brief.
I just wanted to respond in that I think what is
interesting is I think about 60 percent of the businesses in
this country use credit reports as one of the tools that they
use in making a final determination. So this is not like--
evidently, there has been some reason to correlate that as a
part of the screening process, that credit reports are being
helpful. Otherwise, we wouldn't have such a large number of
employers using that tool.
Obviously, we already have laws that prohibit
discriminating against someone because of race, and everybody
on this panel I think would agree that is unacceptable and that
is the reason there are laws on the books to do that.
But, also, this bill even precludes an applicant from
allowing a business owner to run a credit report even if he or
she requested it, basically taking away the individual's right.
And, quite honestly, in some cases--I have been an employer. We
have done credit reports on employees. Certainly it was just a
tool, and I think the thing I would say to you is that I don't
think it is the primary tool used, but I think that evidently
the business community has found it to be a useful tool.
And the fact that if I had two or three applicants who
maybe were going to perform managerial functions in my company
and they were all equal in many ways and I was looking for a
tipping factor, if I found someone who was having a difficult
time managing their own personal affairs, I would question
whether they had the capability of managing my affairs as well.
So I think there are several things troubling about this
legislation, one, taking away an individual's right. We are
moving left, but we are skipping to the left in this area. And,
also, telling businesses that they can't use tools that they
have evidently found to be effective in making hiring
decisions, to me, is another taking, and certainly, I think our
Founders didn't intend for us to move in that direction.
Also, I ask unanimous consent to enter into the record
statements submitted by NFIB, the Financial Services
Roundtable, and 30 other business and trade associations, all
whom are opposed to this legislation.
Mr. Gutierrez. Without objection, it is so ordered.
Mr. Neugebauer. I thank you, and I yield back my time.
Chairman Gutierrez. Anybody else?
We are ready to hear from the author of the bill. For our
first panel, we will hear from the author of H.R. 3149,
Representative Steve Cohen from the 9th District of Tennessee.
Mr. Cohen, you have 5 minutes.
STATEMENT OF THE HONORABLE STEVE COHEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mr. Cohen. Thank you, Mr. Chairman. I appreciate the
opportunity to address the committee, and I also thank the
ranking member for agreeing to this hearing and the members who
are here on this panel.
The Equal Employment for All Act is an important bill, and
I hear the arguments made in opposition. But the fact is in
this economy, which is in a recession--regardless of what any
person might say or group, we are in a recession. It is
difficult to find jobs right now, and when some employers use
credit checks for a lot of people, particularly minorities, it
makes it almost impossible to get a job.
The use of credit checks to determine employment is a
growing trend but a dangerous trend, and while some submit that
it is an effective tool, that business must find it effective,
I would submit to you, Mr. Chairman and members of the
committee, there is no way business can know it is effective
because if they don't give a person a job because of a bad
credit score, how do they know that was a bad employee? They
never hire anybody who has a bad credit score if they use that
as the determining factor not to hire him. So they never know.
They hire the other guy or the other woman.
It is unfortunate that in our society, a high percentage of
the people with bad credit scores are minorities, and I will
get to that in a minute. In my district, 1 in 10 people are
unemployed. My district has a very high African-American
population. Among African Americans, it is more like one in
five, and throughout the Nation, we see those same types of
statistics. While in the Nation, it is 9.6 percent
unemployment, among African Americans it is 16.3 percent, and
among Latinos it is 10.4 percent.
One of the reasons that credit checks contribute to the
high unemployment among African Americans and Latinos is
because they have not had a history of wealth in this country.
That is what is known, gentlemen, as institutional racism. It
is not racism on the front. I am not going to hire you because
you are African American or you Latino or I am not going to
hire you because you are a woman. It is the history of our
Nation and what goes into it and the work product. And when you
are African American and your family started out as slaves,
from 1865 before, you didn't have a chance to build up wealth.
Caucasians did. So you are starting behind.
Jim Crow laws, you are still not getting jobs and
opportunities, and you are getting to go to separate Plessy v.
Ferguson schools that mean you are still in the hole. Whites
are going to the good schools and getting the good books and
getting the opportunity and Blacks aren't. So Whites build up a
history of having money, family wealth passed on, the old
family farm that we are trying to protect through inheritance
laws, make sure we get whole family farms and not just 60
percent of it.
So those folks have money. They lose their job in this
economy--and a lot of people have lost their jobs because they
just cut back. FedEx cut off 10 percent. If you are Caucasian
and your family built up some wealth from having friends whom
you could sell real estate to and get a better 6 percent of a
higher and more expensive house than somebody who is poor who
doesn't have as many friends for those wealthy houses or a
stockbroker contact that you know from the country club or
whatever, you don't have accumulated wealth to help you through
bad times. So you are more likely to have a bad credit score.
The effect of that is African Americans, Latinos, and
others who have immigrated to this country and haven't had
wealth built up, that is what is called institutional racism.
It is something that is not racism on the front. It is
something that just happens through the institution of what
goes in this Nation. So it is there, regardless of one does it
on the front or doesn't even realize that it is something that
is just part of the system.
Forty-three percent of all employers admit to performing
credit checks despite the fact that there is no study that says
it is effective. Eric Rosenberg with TransUnion said in a
hearing in Oregon during sworn testimony that his company had
zero statistical evidence to document that employees with bad
credit checks are more likely to steal or commit fraud than
workers with perfect credit. A study at Eastern Kentucky said
the same thing, as highlighted in The Hill in an article this
morning about these studies.
Nothing shows it is effective, and I would submit to you,
some would say, oh, somebody's going to be more of a risk.
There are exceptions for financial situations, but if somebody
has a bad credit rating and they want a job, I would submit to
you, once they get that job, they are less likely to commit any
type of fraud than anybody else because they want that job.
They are seeking a job, and they want to pay off their bills
and earn a living. So they want to keep that job and not only
not get arrested but keep that job. I think they are going to
be extra good employees.
There is simply no basis to show that it is an effective
tool, and I think it is used in a de facto way to discriminate
against people, whether it is intended to or not.
This legislation has been endorsed by the NCAAP, the
National Organization for Women, the National Consumer Law
Center, the Leadership Conference on Civil Rights, the National
Association of Consumer Advocates, Unite Here, the National
Employment Law Project, the U.S. Employers Interest Research
Group, the AFL-CIO, and the Lawyers Committee for Civil Rights.
The law is simple. It says people should have a chance,
some would say a second chance. I would say it is not even a
second chance because they have done nothing wrong, but in show
business, people get second chances all the time. In business,
they do. If you think a credit check really determines whether
you can be trustworthy, ask Sir Alan Stanford of Stanford
Financial and all of his people, and what is the man's up name
up in New York who ripped everybody off? Madoff, Bernie Madoff.
They had great credit ratings. It is hard to tell somebody who
is a crook and isn't credit ready, and I would submit a hard-
working person with a bad credit rating because of this society
who wants a job is a better risk than somebody else, and I
think they want to get that job and keep it to pay off their
bills.
I appreciate the committee's time, and I appreciate the red
light because I have been on the other side of it, and I thank
you for the opportunity to give this testimony.
[The prepared statement of Representative Cohen can be
found on page 47 of the appendix.]
Chairman Gutierrez. Thank you so much for introducing the
legislation, and I won't ask you any questions. I know we have
some witnesses who are going to be enlightening us on your
legislation.
But I would like to just briefly say, they say that people
have the moral responsibility these days to not walk away from
their mortgages, walk away from their bills. I think we have
the same responsibility to make sure they have a fair chance at
taking care of that. I think people do, and given the kind of
crisis that we have, a crisis that was not manufactured by
them, that they have fallen into, I think credit reports,
number one, have a lot of information that is erroneous to
begin with, and number two, don't really tell the true nature,
as you stated earlier.
So I thank you for your legislation.
Mr. Neugebauer, you are recognized for 5 minutes, if you
have any questions.
Mr. Neugebauer. Thank you.
I respectfully disagree with the author of this bill. If it
is found to be ineffective by all these studies, it is
interesting to me that we have a substantial number of
businesses--and I understand it is increasing--that are using
credit reports as a part of and not the sole tool that they are
doing it.
So the other piece of it is is that from the gentleman's
testimony it almost appears that he believes that employers,
small businesses, large businesses across the country are using
credit reports to kind of circumvent the Equal Employment
Opportunity Act and, in fact, are overtly discriminating. I
have not ever seen any reports or evidence of that, and I would
ask the author if he has evidence that there is widespread use
of this to circumvent equal opportunity laws. Because it is a
fairly major accusation that you are making that these
companies are, in fact, using this as a tool to be
discriminatory.
And I would tell you, as a former small businessperson, I
am a little offended by that, the fact that you would think
that, because I was using that, I was using that to
discriminate, and I don't think that is the case. I haven't
seen evidence, and I am certainly open to review such evidence
if you can show me where studies have shown or that the law
enforcement or people enforcing this are finding widespread use
of credit reports to violate the Equal Opportunity Employment
Act.
Mr. Cohen. My passion sometimes might give the wrong
impression. I didn't intend to imply that people were
intentionally doing it. Institutional racism and those things
are things that are just part of the system that we have had
over the years, and when you have had over the years these
factors, where Blacks are less likely to have accumulated
wealth because they didn't inherit granddaddy's plantation or
granddaddy's insurance company, they happen to be working on
the plantation or working maybe at a low level, they don't have
it. It is unwitting, unknowing discrimination.
It is part of a system, and when you have a system where
credit checks are necessarily unequal because you don't have
accumulated wealth to build up on or histories of going to a
certain college to get you into a college or the finances of
your family to get you into that college--and contacts in
college are important. I went to Vanderbilt. You go to
Vanderbilt, you have better contacts to sell stocks to and you
can sell Berkshire Hathaway and more shares of it than if you
went to Texas Southern, and you don't have student body friends
generally who have enough money to buy Berkshire Hathaway.
It is not anything intentional. It is the fact that you get
wealth. It is easier to have wealth if you come from a
privileged background, and all of us who are Caucasian or have
had histories here of working in families have privilege, and
so it is nothing intentional. I am not suggesting people are
intentionally discriminating. I am saying that they are doing
it because of systems in society that we have not ferreted out,
and it will take years to do that.
Mr. Neugebauer. I guess there I go again disagreeing with
you. I know a lot of people who didn't inherit a plantation or
didn't inherit anything, who actually started from scratch.
Mr. Cohen. There is no question about that, sir. That is
why you don't find any Black people who did inherit a
plantation.
Mr. Neugebauer. I have African-American friends, I have
Hispanic friends, who went out and basically they didn't
inherit anything and they started from scratch and they started
small businesses and they worked hard. This country was founded
on the principle that if you work hard and apply yourself, you
have the opportunity to succeed and to fail. Many times people
fail; sometimes people succeed.
But, again, I think the concept that the reason we are
doing this is because not everybody inherited something again
is a flawed reason to be taking away the rights and privileges
not only of the people who are potentially looking for
employment but also for the people who are actually employing
and creating jobs in this country and penalizing them somehow
because of an unsubstantiated reasoning that you are giving
this committee today that people are using this process to
somehow circumvent laws that are already in place. It is
already against the law, and if someone believes that they were
turned down for employment because of their race, they have an
avenue to do that. It doesn't matter if it was because of the
way they filled out the application or a reference check or
their credit report. It is against the law to do that, and we
don't need any more laws.
Chairman Gutierrez. The gentleman's time has expired.
Would anyone else would like to ask questions?
Hearing no questions of the witness, I just want to enter
into the record a report entitled, ``Discrediting Workers'' by
Demos, and specifically pages 3 and 4 where Bank of America was
found to have discriminated against African Americans by the
very use, by a Federal judge, of using credit reports and
disproportionately not hiring African Americans for entry level
positions precisely because of using credit reports.
Mr. Neugebauer. And Mr. Chairman, were they prosecuted for
that?
Chairman Gutierrez. There is a civil case.
Mr. Neugebauer. And so what was the--
Chairman Gutierrez. I don't think an individual is going to
be sent to jail for this.
Mr. Neugebauer. What was the outcome of it?
Chairman Gutierrez. The outcome is that they have to go
back and redo the whole thing over again. Because what the
Federal court found and the judge found was that there was
absolutely no good reason for using the credit report to
determine whether or not the person was going to be a good
employee, number one, and that even using the same credit
scores--imagine, the same credit scores--this group got 700,
this group using the same credit scores you still find
disproportionate number of people not getting a job based on,
unfortunately, the color of their skin. But we will give you a
copy of the report.
And the witnesses on the second panel, they will be coming
up. So let's go to the witnesses who will speak to Mr.
Neugebauer's questions.
Ms. Waters. Before my colleague leaves, I would like to
thank him for giving us this report and having this
legislation. It is not easy to talk about discrimination or
racism. You get accused of playing the race card every time,
and so it has prohibited many folks from moving forward on some
of these issues. But I want you to know that I appreciate the
fact that you have the courage to do so.
I am a cosponsor of this bill, and I think that we should
all work toward making sure that these kinds of actions do not
limit the ability of individuals to get a job. I do not believe
credit scores have anything to do with whether or not you will
be a good employee.
Thank you very much.
Mr. Cohen. You are welcome. Thank you.
Chairman Gutierrez. Thank you.
We will go to Mr. Scott.
Mr. Scott. For the record, I, too, want to commend the
Congressman from northwest Tennessee for taking this on. These
are tough times. People are having difficulties, and the one
thing that the credit reports determine, it deals with credit,
good times, bad times. But the one thing that a credit report's
history does not do, it does not determine or predict job
performance or have anything to do with that. So it is sort of
like measuring somebody but measuring them with the wrong set
of measurements. You are attempting to correct that; and I,
too, am proud to be a cosponsor of your bill and want to really
just let you know how much we appreciate you taking the lead on
this.
Thank you.
Chairman Gutierrez. Thank you, Congressman.
We are going to call our first panel.
Mr. Cohen. Thank you, gentlemen.
Chairman Gutierrez. The first--I am sorry, the second
panel. This is what happens when you have a panel of one.
We are going to introduce Sarah Crawford, senior counsel
for the Lawyers' Committee for Civil Rights Under Law. Next, we
have Chi Chi Wu, staff attorney from the National Consumer Law
Center. Following her will be Donald Livingston, partner of
Akin Gump Strauss Hauer & Feld, LLP, representing the U.S.
Chamber of Commerce. Next is Adam Klein, a partner of Outten
and Golden, LLP. Next is Judy Gootkind, VP of finance and
administration for Creative Services and a member of the board
of directors of the National Association of Professional
Background Screeners. Next, we have Colleen Parker Denston,
director of H.R. at Worcester Preparatory School on behalf of
the Society for Human Resource Management. And last but not
least, Hilary Shelton, senior VP for advocacy at the NAACP.
You are welcome, and we will begin with Sarah Crawford.
Please, you are recognized for 5 minutes.
STATEMENT OF SARAH CRAWFORD, SENIOR COUNSEL, LAWYERS' COMMITTEE
FOR CIVIL RIGHTS UNDER LAW
Ms. Crawford. My name is Sarah Crawford, and I am senior
counsel with the Employment Discrimination Project for the
Lawyers' Committee for Civil Rights Under Law. I am honored to
testify here today in support of the Equal Employment for All
Act.
In light of research showing the lack of predicted value of
credit information, credit checks create an unnecessary
obstacle for those seeking gainful employment. Credit checks
create barriers for those who apply for a job in order to pay
their bills, to support themselves and their families, and to
get out of debt. I am here today to comment on the negative
impact, particularly for communities of color.
Credit checks are becoming an increasingly prevalent
practice in the employment sector, as we have heard. According
to a recent survey conducted by the Society for Human Resource
Management, approximately 60 percent of its member employers
use credit checks as a hiring tool, compared to 35 percent of
its members in 2001. Some employers report that they use credit
checks in hiring for all jobs. This practice is particularly
troubling in light of research indicating that an individual's
credit history does not predict job performance or risk of
theft or fraud in the workplace.
Contrary to the sales pitch promulgated by credit bureaus
that profit from selling credit reports to employers, credit
reports do not provide meaningful insight into character,
responsibility, or propensity for theft in the workplace. And,
as we have heard, a TransUnion official recently testified that
there is no research to justify the practice.
Research has shown that credit information does not predict
job performance, as demonstrated by a recent study that looked
into the credit reports of nearly 200 current and former
employees working in the financial services areas of six
companies. The study revealed that those with good credit
reports were no more likely to receive positive performance
evaluations and were no less likely to be terminated from their
jobs. In fact, one aspect of the study revealed that workers
with a higher number of late payments actually received higher
performance ratings. So think about that. It makes common sense
that someone who has bills to pay may have an added incentive
to do their job well and perform well.
While credit reports show whether bills have been paid on
time, they do not reflect the circumstances surrounding debts
or reasons for any late payments. For example, a credit report
will not explain that an individual's credit suffered because
she was the victim of identity theft, that her credit suffered
as a result of divorce or death of a spouse, that she lost her
job unexpectedly because her employer went out of business, or
that she lost her health insurance coverage and incurred
substantial medical bills.
Indeed, credit reports fail to provide context and fail to
provide information that can be easily interpreted for
employment purposes, and I encourage you to review the credit
report that was provided as an attachment to my testimony that
was submitted here today and try to determine for yourself if
that person is a good employee or a bad employee. It is very
difficult to use the information in the credit report and make
any kind of judgment about whether that person will be a
performer.
The medical debts reflected in credit reports raise
particular concern. Medical debt often arises due to
circumstances outside of an individual's control and can have a
catastrophic impact on personal finances. Seventeen percent of
our citizens are uninsured, including 12 percent of Whites, 21
percent of Blacks, and 32 percent of Hispanics. And what
happens when the uninsured face a major medical illness? Often,
they incur medical debt; and further, a significant portion of
those with health insurance face medical debt due to medical
procedures that are not covered. Although most employers report
that they do not base hiring decisions on medical debt, the
impact of medical bills could be reflected in outstanding
judgments, bankruptcies, foreclosures, and other forms of debt
that employers may take into consideration. Indeed, over half
of accounts in collection arise from medical debt.
Credit background checks negatively and disproportionately
impact communities of color and the poor. Unemployment has
skyrocketed in recent years, and the effects of the recession
have fallen most harshly on minorities. Currently, 16 percent
of Blacks and 12 percent of Hispanics are unemployed, compared
to 9 percent of Whites. Twenty-five percent of Blacks and
Hispanics live in poverty, according to a recent report.
Credit checks only compound this crisis. Because minorities
are significantly more likely to have poor credit, credit
checks screen out disproportionate numbers of minorities from
job opportunities.
In addition, I think, as most of you know, credit reports
are rife with errors. One study found that most consumer credit
reports surveyed contained some kind of error or mistake.
I will just conclude by saying that this practice is based
on flawed assumptions that have detrimental effects on those
who simply want to work so that they can pay their bills and
escape the vicious cycle of debt and unemployment.
[The prepared statement of Ms. Crawford can be found on
page 51 of the appendix.]
Chairman Gutierrez. Thank you so much.
Next, we will have Ms. Chi Chi Wu, who is staff attorney
for the National Consumer Law Center. You are recognized for 5
minutes.
STATEMENT OF CHI CHI WU, STAFF ATTORNEY, NATIONAL CONSUMER LAW
CENTER (NCLC)
Ms. Wu. Thank you, Mr. Chairman. Thank you, Representative
Neugebauer, and members of the subcommittee, for inviting me
here today.
My name is Chi Chi Wu. I am testifying on behalf of low-
income clients at the National Consumer Law Center. Mr.
Chairman, thank you for holding this hearing regarding H.R.
3149, the Equal Employment for All Act.
The use of credit reports in employment is a practice that
is both harmful and unfair to American workers. For this
reason, we strongly support H.R. 3149 and thank the chairman
and Congressman Steve Cohen for introducing it.
This bill would restrict the use of credit reports in
employment to only those positions for which it is truly
warranted, which is those requiring a national security or
FDIC-mandated clearance.
We oppose the unfettered use of credit histories and
support this bill for a number of reasons.
First is the absurdity of the practice. Considering credit
histories in hiring creates a vicious catch-22 for job
applicants. A worker who loses her job is likely to fall behind
on her bills due to lack of income. She can't rebuild her
credit history because she doesn't have a job, and if she can't
get a job, she has bad credit. Commentators have called this a
financial death spiral.
Now, opponents of H.R. 3149 have argued there is no catch-
22 because employers use credit checks strategically and take
into account the circumstances for a worker's financial
difficulties, but we can't assume all employers are going to be
this wise and fair. Yes, some employers may review credit
histories carefully and thoroughly, but others may
automatically screen out all applicants with a weak credit
record. After all, it is easier and quicker to make a yes or no
decision based on credit, especially in a competitive market
where there are lots of applicants. Why take the trouble of
being so careful? In fact, as Representative Neugebauer
mentioned himself, that is a tipping point. If you have a bunch
of candidates in front of you who are equally good, just get
rid of the one with the bad credit record.
That is what happened to Robert Mendez, an IT worker
featured just this Tuesday on the PBS Nightly Business Report.
He lost his job over a poor credit record, even though he
explained it was the result of a layoff and was told it
wouldn't be a problem, but it was.
And, by the way, having provisions for consent in this bill
wouldn't do any good for American workers who are hurt by this
practice because the Fair Credit Reporting Act already requires
the employee's consent to pull their credit record, and
employees have to give it. If they want to be considered for
the job, they have to consent. We already have that. It hasn't
been effective in protecting workers.
The use of credit history for job applicants is especially
absurd when we have massive job losses and an unemployment rate
of 9.6 percent and nearly 15 million workers looking for a job.
It presents another barrier for economic recovery. It is the
proverbial process of kicking someone when they are down.
Combine job losses with foreclosures and other fallouts of
the economic crisis and what we have seen is plummeting credit
scores and damaged credit records. Fair Isaac reports that over
one-quarter of consumers have a credit score under 600,
considered a poor credit score, a 10 percent increase than
before the recession. That means one-quarter of American
workers are at risk of losing a job opportunity or even being
terminated over their credit history.
This is now exactly the wrong time to be permitting this
unfair and inaccurate practice. Passing H.R. 3149 isn't just
the right thing to do; it is an economic recovery measure.
As we have heard, the use of credit histories also
discriminates against African-American and Latino job
applicants. We have had study after study documenting how they
as a group have lower credit scores which are supposed to
reflect their credit records. These groups have also been
disproportionately affected by predatory credit practices, such
as the marketing of subprime mortgages and overpriced auto
loans and, as a result, have suffered higher foreclosure rates,
all of which damaged their credit history.
Despite all this harm to American workers, there is no
evidence that credit history benefits employers by predicting
job performance. We have heard that studies on this issue
haven't found a correlation. Even industry representatives have
said there is no correlation.
Opponents to H.R. 3149 have cited a report noting that one
of the warning signs exhibited by some fraudsters is financial
difficulties or living beyond their means. Now, just because
some fraudsters had financial difficulties doesn't mean that
any worker with money problems is predisposed to theft. That is
implying that 25 percent of American workers are likely
thieves.
The same study found that men are responsible for twice as
much fraud as women. Workers over 50 incur losses that are
twice as high, and another warning sign for fraud is divorce.
No one is suggesting screening out men, older workers, or
divorced workers because they are supposedly prone to
committing theft.
Also, some of the most frequent users of credit checks,
such as health care or social service providers, aren't
industries that handle large amounts of cash. Why are they
screening the credit histories of day care workers,
administrative assistants, and nurses?
Finally, as we have testified many times here before, the
credit reporting system has highlighted high rates of
inaccuracies and a lot of flaws, rates that are unacceptable
for purposes as important as use in employment. Some 3 percent
to 12 percent to 37 percent--
Chairman Gutierrez. Ten seconds to wrap up.
Ms. Wu. In conclusion, the issue is whether workers are
fairly judged on the ability to perform a job or discriminated
against. I urge Congress to pass H.R. 3149.
[The prepared statement of Ms. Wu can be found on page 86
of the appendix.]
Chairman Gutierrez. Next, we will hear from Mr. Donald
Livingston for the U.S. Chamber of Commerce.
STATEMENT OF DONALD R. LIVINGSTON, PARTNER, AKIN GUMP STRAUSS
HAUER & FELD LLP, ON BEHALF OF THE U.S. CHAMBER OF COMMERCE
Mr. Livingston. Thank you for inviting me to testify today
on behalf of the United States Chamber of Commerce.
My name is Don Livingston. As you said, I am a partner with
Akin Gump. I am also a former general counsel of the United
States Equal Employment Opportunity Commission, where I
directed the country's litigation in cases of employment
discrimination.
H.R. 3149 addresses concerns that the use of credit history
information for employment decisions cannot be justified in
many circumstances, and it addresses the concern that the
adverse consequences of using credit history information falls
more heavily on minorities. Plainly, these are important
concerns, but these are concerns that we believe have been
effectively dealt with by Congress under existing laws.
Since at least 1973, employers have understood that they
cannot use credit histories unless they can demonstrate that
the practice is predicated and supported by considerations of
business necessity. It was in 1973 that the EEOC issued a
decision requiring that an employer's credit policy be job
related if the burdens of the policy fall more heavily on
minorities. The courts have agreed with the EEOC. Employers can
use credit history information only when the employer can show
it is job related for the job in question.
H.R. 3149 differs from this approach. H.R. 3149 would not
allow an employer to use job-related credit information except
for specific categories of jobs. These are public-sector jobs,
jobs requiring national security or FDIC clearances, and jobs
at financial institutions.
H.R. 3149 would eliminate the opportunity that employers
have under existing law to demonstrate that the use of credit
histories to assess the qualifications of applicants for other
jobs is job related for those jobs. It cannot reasonably be
argued that the existing job relatedness standard is not
stringent or that it is not a powerful deterrent to an
employer's broad use of credit history information.
My written testimony provides several examples where courts
have enjoined the use of credit information because the
employer was unable to demonstrate that the information was job
related for the specific jobs for which it was used, and I
believe that the chairman has noted a more recent case where
something similar occurred under employment discrimination
laws.
The job relatedness requirement under equal opportunity law
has served well. The proposed legislation would serve less well
because, except in narrow circumstances, it would prevent
employers from using credit histories that they can justify by
job relatedness and business necessity.
I hope that my testimony proves helpful to the committee.
[The prepared statement of Mr. Livingston can be found on
page 78 of the appendix. ]
Chairman Gutierrez. Thank you so much.
Next, we will hear from Adam Klein.
Mr. Klein, you are recognized for 5 minutes.
STATEMENT OF ADAM KLEIN, PARTNER, OUTTEN & GOLDEN LLP
Mr. Klein. Thank you. Good morning, and I appreciate the
opportunity to come before the committee this morning.
I am a plaintiffs' side civil rights lawyer working in the
field of employment discrimination law. I think it is very
fortunate that I can respond to the points that Mr. Livingston
has made here.
My practical experience and that of my firm and generally
on the plaintiffs' side employment bar is that the problem or
use of credit as a screen for employment is largely
undetectable. The reality is that applicants who seek
employment are not told that they are denied employment based
on their poor credit history. What they may find out is they
didn't get the job, but what they will not find out is why, and
it makes logical sense. Why would a prospective employer tell
an applicant the reasons that they did not get hired? It is
obvious that, for the most part, in the overwhelming majority
of cases or instances where applicants are denied employment,
they are not going to have any idea that the use of credit was
a factor in the decision.
And you ask, isn't there at the Equal Employment
Opportunity Commission the laws that Mr. Livingston mentioned,
the Civil Rights Act of 1964 which, in fact, has banned use of
credit if it has adverse impact and cannot be justified? Yes,
but the EEOC is a charge-driven agency, meaning the applicants
who are denied employment, who had their rights violated, need
to know that in order to file a charge of discrimination. It is
not enough to tell the EEOC that an African American or Latino,
I wasn't hired and that I think that is suspicious. That isn't
sufficient information for the EEOC, a charge-driven agency, to
take action.
Moreover, there are many other reasons that can come about
why an applicant isn't hired, including the fact of the matter
is that, by and large, it is a common-day event that people
apply and don't get hired. That is not suspicious to a lot of
people who go through that process. I am sure we have all not
been hired over the course of our lives. So this is not an
event that raises suspicion.
What happens in my experience--in my firm's experience, I
think generally, is that the isolated examples where there has
been enforcement is in the rare circumstance where an employer
inexplicably tells the applicant they were denied the job
because of poor credit. We have had a couple of examples like
that, where the employer sends a letter to the applicant saying
you are conditionally hired subject to a background check and
subsequently told, after they were conditionally offered the
job, that I am sorry, we can't actually hire you because you
failed our background check. That is the rare, rare instance.
It is an exceptional circumstance where an applicant would be
told that information.
And so while there is enforcement provided by the Civil
Rights Act, it is extremely difficult to detect this practice
and for the EEOC to take effective action. I think that has
historically been the case. It is why we see so few of these
cases out there.
It also is obvious when you look at the statistics that 60
percent of employers are using this practice. If no one
seriously argues that there is adverse impact, that racial
minorities will be harmed by this practice, and yet there is no
or very little enforcement action, there is a reason for that.
So the problem is detection. The problem is employers are smart
enough not to tell applicants why they were denied employment,
and without that critical piece of information there is no
enforcement available to the EEOC because EEOC is not going to
be put on notice to a charge that this is a practice that is
happening in the workforce.
Another problem is that even if you have an applicant who
receives disclosures that credit was used for a decision, under
the Fair Credit Reporting Act oftentimes the information that
is provided is unhelpful. It just provides information that you
can challenge the credit report. It doesn't say what the
information was used for. It doesn't provide any context.
Oftentimes, we don't receive that, it has been our experience.
Moreover, if you look at the information provided in the
credit reports, they are highly inaccurate. I would suggest,
and I say this, pull your own credit history. Take a look at
it. See if it is accurate. See if you can determine, if there
is a negative entry, what that means, where that came from.
Oftentimes, it is a collection agency or something that is
indecipherable. That is the information employers are using to
decide whether someone should be employed or not.
It doesn't make any sense. If it came to light, if
employers are forced to disclose they used this information, it
would clearly violate Federal civil rights statutes, and they
would be targeting enforcement based on that.
So I would urge this committee to pass H.R. 3149. I think
it is long overdue and would have a major impact on the U.S.
economy.
Thank you.
[The prepared statement of Mr. Klein can be found on page
71 of the appendix.]
Chairman Gutierrez. Thank you so much.
Next, we will have Ms. Judy Gootkind, please, for 5
minutes.
STATEMENT OF JUDY GOOTKIND, VICE PRESIDENT OF FINANCE AND
ADMINISTRATION, CREATIVE SERVICES, AND MEMBER, BOARD OF
DIRECTORS, NATIONAL ASSOCIATION OF PROFESSIONAL BACKGROUND
SCREENERS (NAPBS)
Ms. Gootkind. Chairman Gutierrez, Ranking Member
Neugebauer, and members of the committee, thank you for this
opportunity to testify.
My name is Judy Gootkind, and I appear here today on behalf
of the National Association of Professional Background
Screeners, NAPBS. I am member of NAPBS' board of directors. My
company, Creative Services, Inc., located in Mansfield,
Massachusetts, is a founding member of NAPBS, and my role at my
company is vice president of finance and administration.
NAPBS is a trade association founded in 2003 which
represents over 700 companies engaged in employment and tenant
background screenings across the country. Our membership
includes a range of companies from Fortune 100 to small worker
businesses. In fact, the majority of our regular members are
small businesses with 12 or less employees. Collectively, we
conduct millions of employment and tenant screening checks each
year.
In the employment context, we provide background checks for
private employers, volunteer organizations, nonprofits,
government, public utilities, health care, higher education,
and publicly held corporations. NAPBS seeks to promote ethical
business practices, promote compliance with the Fair Credit
Reporting Act and State law analogs, and foster awareness of
issues related to consumer protection and privacy rights within
the background screening industry.
Our industry is highly regulated both by the Federal Trade
Commission and the newly created Bureau of Consumer Financial
Protection. Our ability to provide our employer end users with
consumer reports is driven by consumers' consent for such
reports to be generated when they apply for employment or seek
a promotion.
Before responding to the committee's questions, I would
like to point out NAPBS' concerns with H.R. 3149, the Equal
Employment for All Act. We believe the legislation too narrowly
restricts the use of credit reports for employment purposes and
all but prohibits them in the private employment space. Our
specific concerns are as follows:
The legislation would limit the use of credit reports in
private employment to certain positions at financial
institutions, a narrowly defined term under the Fair Credit
Reporting Act.
The legislation would prohibit the requesting of credit
reports for the following types of positions: lawyers, mortgage
lenders, property managers, cashiers, pharmaceutical
representatives, pharmacists, asset management and financial
planners, jewelers, health providers, NBA referees, executives
in nonfinancial institution employers, accounting employees,
finance employees, information technology employees,
procurement employees, and academic financial aid employees.
Some would say that credit reports are reputation
collateral, and for many consumers their credit history may be
a good thing. NAPBS feels that there are instances beyond those
which H.R. 3149 would allow in which it would be important and/
or necessary to our employer end users to request a credit
report, either as a risk mitigation or a verification tool.
I will turn now to the questions posed by the committee,
and in the interest of time, I have shortened your questions.
How do we develop the reports that you provide to
employers?
Each company who provides consumer reports to a third party
is defined under the Fair Credit Reporting Act as a consumer
reporting agency, or a CRA. We provide consumer reports to
third party end users for a variety of permissible purposes
under the Act, including for employment purposes. The FCRA
specifically lists those permissible purposes for the use of
such reports in Section 604.
One such permissible purpose is for employment, which is
defined in the law as a report used for the purpose of
evaluating a consumer for employment, promotion, reassignment,
or retention as an employee. A consumer report could include
information from a variety of sources, including a credit
history report, employment verification, or education
verification.
It is important to mention that, in the context of
employment checks, a credit score is never included. The three
major credit bureaus do not sell credit scores for employment
purposes, nor are CRAs able to report such scores if the
purpose of the consumer report is for employment.
Question: Has the use of credit reports for employment
increased over the past decade?
NAPBS does not keep such data. From personal experience, I
can tell you that at my company the request for credit reports
from our end users has decreased.
Question: Do you add any information in the reports you
receive from credit bureaus?
No. As a reseller of credit reports, most CRAs merely pass
through the credit reports they receive from the credit
bureaus.
What kind of information is included in credit reports?
We have provided a sample of a report as a part of our
written testimony.
Do you have any proof that a credit record is an indicator
of someone's ability to successfully perform the duties of a
job?
CRAs are the providers of the information to end users when
they are requesting background information, be it education or
employment references or verification, credit history or
criminal history. We believe the committee is better served by
facts, rather than our personal views.
Thank you for the opportunity to testify.
[The prepared statement of Ms. Gootkind can be found on
page 63 of the appendix.]
Chairman Gutierrez. You are welcome.
Colleen Parker Denston, please, you are recognized for 5
minutes.
STATEMENT OF COLLEEN PARKER DENSTON, DIRECTOR OF HUMAN
RESOURCES, WORCESTER PREPARATORY SCHOOL, ON BEHALF OF THE
SOCIETY FOR HUMAN RESOURCE MANAGEMENT (SHRM)
Ms. Denston. Chairman Gutierrez, Ranking Member Neugebauer,
and distinguished members of the subcommittee, my name is
Colleen Denston. I am the director of human resources at
Worcester Preparatory School located in Berlin, Maryland. I am
also a member of the Society for Human Resource Management,
otherwise known as SHRM. I thank you for the opportunity to
appear before the subcommittee today to discuss the use of
credit background checks in employment, and the Equal
Employment for All Act.
SHRM appreciates the heightened relevance of today's issues
in the current economic environment. To be clear, we believe
that employment decisions should be made on the basis of an
individual's qualifications such as education, training,
professional experience, reliability, and integrity, and not on
factors that have no bearing on one's ability to perform job-
related duties.
However, SHRM does believe there is a compelling public
interest enabling our Nation's employers to take a full
assessment of potential hires. This is because the consequences
of making a poor hiring choice can be great. Consequences
include financial or property losses for the company or
employees, legal liability in the form of negligent hiring,
identity theft, and physical harm to employees, customers, and
property.
To mitigate the potential of these threats in the
workplace, the H.R. Department may conduct a background check
on the final candidates or candidate. Some State laws even
require employers to conduct background checks for certain
positions such as licensed health care professionals, day care
providers, and teachers.
The background check process is described in detail in my
written testimony. Under the Fair Credit Reporting Act, an
employer that uses a third party or consumer reporting agency
in a background process must notify the potential employee in
advance, and it must obtain the applicant's approval to have
his or her background checked by the provider.
Before taking any adverse action based on that background
report, such as deciding not to hire the individual, the
employer is first required to give the applicant a copy of the
background report and also a copy of a summary of your rights
under the Fair Credit Reporting Act, which is a document
prescribed by the Federal Trade Commission.
As noted in my written testimony, employees are already
afforded Federal protections from the misuse of credit
background reviews. Beyond the Fair Credit Reporting Act,
employers are barred by the Civil Rights Act of 1964 from using
background checks to screen out protected job applicants. We
are, therefore, very concerned that the Equal Employment for
All Act, as currently drafted, would nullify the right afforded
to most private organizations under the Fair Credit Reporting
Act to consider credit information and many other factors in
making employment decisions.
Additionally, the legislation effectively concedes that it
is appropriate for some employers to conduct credit checks, as
evidenced by the bill's exceptions for national security or
Federal Deposit Insurance Corporation clearance positions,
State and local government positions, and supervisor or
managerial position or executive positions at financial
institutions. However, this is hardly a complete list of
positions for which the public may have an interest in the
integrity of its applicants, specifically those with the
responsibility for managing money, property, personal identity,
or financial information and other critical resources.
Earlier this year, SHRM released one of the most complete
surveys of employer background screening practices. The report
found that the employer use of credit checks has not increased
in recent years. Sixty percent of respondents said they conduct
credit checks at least on some candidates, compared to 61
percent that conducted credit checks in a similar report done
in 2004.
Most organizations do not do credit checks at all: 4 out of
10 organizations reveal that they do not conduct credit checks.
Employers generally conduct credit checks only for certain
positions. Those positions include ones with financial
responsibility, senior executive positions, and ones with
access to highly confidential employee information. Employers
overwhelmingly use credit checks at the end of the hiring
process, not to screen out applicants. At least 87 percent of
organizations initiate credit checks only after a contingent
offer is made--that was 57 percent--or after the job--which was
30 percent.
In summary, employer reviews of credit information are one
small but important part of the overall hiring process. Current
Federal laws already safeguard employees, and job applicants
from discrimination and background investigation and preserving
employer's right to review credit information ensures the
integrity of their work forces and helps protect employees,
consumers, and businesses of all size.
Thank you for your invitation to participate in today's
hearing, and I welcome any questions you may have.
[The prepared statement of Ms. Denston can be found on page
56 of the appendix.]
Chairman Gutierrez. Thank you so much. Now, we have Mr.
Hilary Shelton, Senior VP for NAACP. You are recognized for 5
minutes, sir.
STATEMENT OF HILARY O. SHELTON, DIRECTOR, NAACP WASHINGTON
BUREAU
Mr. Shelton. Good morning, Mr. Chairman. My name is Hilary
Shelton, and I am the director of the NAACP's Washington
Bureau. The Washington Bureau is the Federal legislative and
national public policy arm of our Nation's oldest and largest
grassroots-based civil rights organization.
I would like to begin by thanking Chairman Gutierrez and
Ranking Member Hensarling for calling this important hearing,
and I would also like to give special thanks to Chairman
Gutierrez for cosponsoring this very crucial legislation.
Also, finally, I would like to thank our good friends,
Congressmen Cleaver, Green, Watt, Waters, Scott and others for
their leadership on these crucial issues on financial services
concerns.
And finally, I would like to extend a sincere appreciation
of the NAACP to our good friend, Congressman Cohen, for
introducing this crucial legislation.
The NAACP strongly supports H.R. 3149, the Equal Employment
for All Act and urges its swift enactment. We continue to
oppose the use of credit reports by employers when considering
potential employees, as credit reports have proven to be
racially biased and in most cases are irrelevant to the
positions for which the individuals are being considered.
Mr. Chairman and members of the subcommittee, as you know,
our Nation is going through one of the most difficult economic
times in recent history. The most recent numbers indicate that
almost 15 million Americans were unemployed in August of this
year, which has resulted in a national unemployment rate of
about 9.6 percent. At the same time, the unemployment rate
among African Americans was 16.3 percent, and among Latinos was
12 percent. As we all know or can imagine, these high
employment rates have led millions of Americans to postpone
paying back their credit card debt, to borrow, to charge their
credit cards to the limit, or to make difficult financial
decisions they would not ordinarily face if they indeed had a
job. As a result, their credit ratings may be more reflective
of their current unemployment situation than the type of
employees they may very well turn out to be. And since African
Americans and other racial and ethnic minorities are
disproportionately unemployed, their credit reports are going
to be disproportionately negatively affected.
Furthermore, African Americans and other racial and ethnic
minorities were targeted for decades by unscrupulous predatory
lenders and are now facing or have gone through a foreclosure
at unprecedented and highly racially disparate rates.
And now we enter into the Catch-22. With more potential
employers using credit reports than ever before to assess
potential employees, those with checkered credit histories are
going to be the first eliminated from the potential job pool,
despite the fact that many of them are the very people who most
need a job in order to bring stability to their financial lives
and otherwise.
Are employers using credit reports more now than ever
before? Studies suggest that they are. More than 47 percent of
employers admitted to using credit checks in 2009 at least
sometimes, up from 25 percent in 1998. So the trend continues.
In addition to disproportionate unemployment rates, the
disparately high foreclosure rates due to years of systematic
targeting, there are several other reasons that credit reports
and similarly credit scores for that matter, which often are
used for the same information, appear to be an unfair and
racially biased means of screening potential employees.
If I might digress for just a moment, I say appear to be
because, as I testified before this committee in 2003, we do
not know exactly what these reports have in them. In essence, a
basic piece of information is shared, but most of it is
considered proprietary. What was clear at that time and what
continues to be evident and for more studies are conducted and
released, is that racial and ethnic minorities consistently
have disproportionately lower credit scores and worse credit
reports and than their Caucasian counterparts. Because we are
sure that credit reports and credit scores are often based on
similar information, it is fair to conclude that the problems
with one are indeed the problems with the other.
In 2007, the Federal Reserve Board report to the Congress
on a credit scoring and racial disparities analysis analyzed
300,000 credit files. Not surprisingly, the study found
significant racial disparities. In fact, the average credit
score for African Americans was approximately half that of
White non-Hispanics, with Hispanics faring slightly better.
There have also been several other well documented studies
by respected governmental, quasi-governmental private
organizations, and academia, all of which come to the same
conclusion. Racial and ethnic minorities have lower credit
scores than their White counterparts.
Taking the next logical step to go to credit scores, we go
to credit reports. So if credit scores and credit reports are
disproportionately unfair to racial and ethnic minority
Americans, why are they being used by more potential employers
than ever before? Frankly, I do not know the answer to that
question, as it makes no sense.
With a few obvious exceptions, there is no credible
evidence that credit reports are an accurate indicator of a
potential employee's ability to perform the assigned duties,
propensity to commit a crime, or even their trustworthiness.
It is the contention of the NAACP that a resume, job
references, and a face-to-face interview are much more reliable
in telling a potential employer more about a job applicant
without distortion. This will allow an individual to be judged
on his or her ability to get the job done, not on irrelevant
facts or unsubstantiated numbers.
Mr. Chairman, I thank you for the opportunity to
participate in this important hearing. I appreciate the
subcommittee holding this hearing, and I look forward to your
questions on this matter. Thank you very much.
[The prepared statement of Mr. Shelton can be found on page
83 of the appendix.]
Chairman Gutierrez. Thank you so much.
I want to go to this report by Demos, ``Discrediting
Workers,'' and I just want to read a couple of paragraphs I
think might be enlightening from the report:
``Earlier this year, the U.S. Government won a case brought
by the Office of Federal Contract Compliance Programs in which
Bank of America was found to have discriminated against--
Mr. Moore of Kansas. Mr. Chairman, could you tell us what
page you are on, please?
Chairman Gutierrez. I am on page 3.
Mr. Moore of Kansas. Thank you.
Chairman Gutierrez. I am on page 3, the last paragraph,
``was found to have discriminated against by using credit
checks to hire entry level; that is, tellers, clerical and
administrative. The percentage of candidates excluded because
of a credit check was significantly higher for African
Americans, 11\1/2\ percent, than for Whites, 6.6 percent.
Generally, civil rights law requires employers to justify
appropriateness of an employment practice if it creates such a
disparate impact on a group historically subject to job
discrimination.''
So there is a disparate impact, and we should figure out
why.
Despite the clear disparate impact of the policy on African
Americans, Bank of America conducted no study to determine
whether credit reports were actually a predictor of job
performance and had not investigated the issue. That is, the
company never went about the business of saying, let's see,
let's do a study. Is this a good program that we should use,
and does it really tell us anything?
An expert cited in the court's decision found the bank's
review of credit reports to be highly subjective with no
specifications about what thresholds had to be met for what
indicators. The judge concluded, ``There is no evidence of any
criteria used by the recruiter in using credit report
information to disqualify applicants.'' In the end, the bank
was unable to offer evidence supporting its main justification
for the practice, which was the credit reports were required
for security and bonding purposes. Americans of color have
comparatively weak credit profiles due in large part to public
policies and lending practices.
And then it goes on to make a statement.
So, that has been shown. And I just want to say that I
thank everybody for putting the issue of consent. But the fact
is, the way lawyers have told me, if I go for a job and they
say can we have, sign for your credit report and I say no, you
can just tell me you are not hired. Thank you. But you are not
getting a job here. So I actually have fewer rights. I should
sign, get it, because I might have a right to sue later on that
you discriminated against me based on that credit report.
So the whole thing of consent I think is really false here.
You can't get the job if you don't consent. As a matter of
fact, they can discriminate against you by simply telling you
you do not have this job; thank you very much. You didn't sign
for the consent. So you are even in a worse position.
And then there are just jobs that, we had testimony in
Chicago from people who literally mop floors and clean
bathrooms who because they have bad credit reports--I don't
quite get it. It is a vicious cycle. We are here to help
Americans. Everybody lifts themselves up by their boot straps.
How do you lift yourself up by your boot straps if you are in
economic turmoil in your credit report?
Credit reports? They have so many errors in them, so many
mistakes. I don't think anybody here would like to be judged by
a third party who makes lots of mistakes. And I would just ask
all my colleagues, since you get free credit reports, just get
your credit report. You are going to find a lot of mistakes and
a lot of bad information on those credit reports. I know I have
done it, and I have to be very, very careful and continue to
look at it and to look at it and to look at it to make sure
that we are there.
And lastly, look, there are historical measures here. Just
drive. I can drive down Cicero Avenue and I can start, I don't
know, around Roosevelt and go to North Avenue and drive down.
Cicero Avenue is a major street. And you can drive for nearly 3
miles through an African-American neighborhood down Cicero, and
you know what, and I just looked at it the other day because I
was just driving, and I didn't see a major bank, not one major
bank. Even the gasoline stations were like Thrifty gasoline
stations. I didn't see Walgreens or an Osco or a CVS open
anywhere. How would I say it? I went and I said oh, there must
be a big grocery store because Black people have to go eat,
they have to go buy groceries, right? There were no Jewels, no
Dominics, none of the major franchises. So the things that we
see advertised on TV, it is almost, I think sometimes if you
are African American you see things on TV and say I wonder
where those stores are at because they are not open in my
neighborhood. Wonder where that bank is, because it is not open
in my neighborhood. So there are conditions.
Now why is it that those neighborhoods are excluded from
those opportunities? And those opportunities have disparate
impact on those communities. And I just want to tell you, you
can go Roosevelt south and you can go North Avenue north and
you find all those wonderful institutions on that same Cicero
Avenue. The only thing that changes is the color of the skin of
the people who live adjacent to that avenue. That is why I
think it is important to look at historical conditions.
And yes, it isn't that people just cry discrimination,
discrimination, discrimination the fact is that if you just
open your eyes you see it.
So I thank all of the witnesses.
And Mr. Neugebauer, you are recognized for 5 minutes.
Mr. Neugebauer. Thank you, Mr. Chairman. It has been a
little difficult sometimes to understand exactly what the
title. I had to go back and look at what the title of this
hearing was. We have talked about a lot of different issues
here.
I want to go back to one of the things that the chairman
was talking about, was the lawsuit that was filed against that
bank. And I don't know whether it was appealed or not, but I
think what it does show is that there are existing laws and
that a case was brought against this bank. They evidently had
hiring policies in that bank that the judge found troubling,
and so the system worked. And we didn't even have this piece of
legislation in place.
I was glad to hear some of the other panel understand and
recognize the value of having somewhat of an idea about the
background of the individuals that are applying for these jobs.
And I also agree with everybody on the panel that
discrimination is unacceptable, and I think we have gone a long
way in removing some of that discrimination in this country.
Have we completely eliminated it? No, but you know there are a
lot of different forms of discrimination in this country.
But really, I think what maybe was the intention of this
legislation, and I have heard some of my colleagues allude to
it as well, is about the economy and about jobs and about
families that are having a hard time across this country. And
all of us are concerned about that when we have almost 15
million people out of work in this country, almost 10 percent.
And when you look at the U6 number, which is those people who
took a lesser job and maybe gave up looking for a job, it is
almost 17 percent. So we have a real problem in our country.
But really what we ought to be spending a lot of our time
on instead of whether employers ought to have the right to run
credit reports or not, we ought to be down on the Floor of this
House of Representatives extending tax breaks for small
businesses all across this country. Those are the people who do
create the jobs. Those are the people that we are talking about
here today who will provide opportunities for minorities and
people of all races and color to be able to have an opportunity
to have jobs in this country and so if they do have jobs, that
they don't have bad credit scores.
And the reason some people have bad credit scores, by the
way, wake up to the real world, is not because they don't have
jobs or good jobs. I know a lot of people who have good paying
jobs that have very bad credit scores. And so just being poor
doesn't mean that you have bad credit and just being rich
doesn't mean you have good credit.
But we ought to stop all of these job-killing things that
this Administration is doing. I was back in my district in
August and time and time and time again they said, Congressman,
I could hire some additional people. I could buy an additional
piece of machinery that I could use in my business. But you
know what? There is too much uncertainty. We don't know what
this new health insurance plan is going to cost us. We don't
know what EPA is going to do with greenhouse gases. We don't
know what the tax environment is going to be. And every time we
turn around, we look at Congress spending money that it doesn't
have and borrowing money from foreign countries and it has
created some uncertainty so we are not doing anything.
And so really, if we really want to help people in this
country have better credit scores, then what we ought to really
be doing is helping people to have better jobs in this country.
And the way we help people have better jobs in this country is
we get this Congress off high center here and quit worrying
about the politics of if we increase taxes for this group or we
don't, what we ought to do is be leaving the money back in the
economy of this country so that we can create jobs in this
country.
Government doesn't create jobs and we have seen that. We
have thrown trillions of dollars at programs, and we are going
to be down on the Floor again this afternoon, another attempt
at letting the government try to create jobs and do incentive
type activities that don't work. They don't work, the President
said they were going to work. And what has happened since then
is we have lost over 2\1/2\ million jobs in this country.
And so I would hope that our efforts really would be to
help these families and help get America back to work instead
of trying to limit the rights of people to provide opportunity
and documentation to get a job and to limit the ability for
employers to make good hiring decisions so that we can move
this country forward.
With that, I yield back my time.
Mr. Cleaver. [presiding] I recognize the gentlewoman from
California, Ms. Waters.
Ms. Waters. Thank you very much, Mr. Chairman. I would like
to try and get a couple of questions in. My first question
would be to Mr. Don Livingston. You were, you directed our
country's litigation in cases of employment discrimination over
at the EEOC. Did you direct any cases relative to
discrimination based on credit checks at all? Did you ever have
any of those cases?
Mr. Livingston. I can't say. I just can't say. We had, we
brought about 500 cases a year and I was there for 3 years.
Ms. Waters. You don't remember any?
Mr. Livingston. No, ma'am.
Ms. Waters. Okay. Thank you. Let me also move quickly to
Ms. Gootkind. You are the Chair of NAPDS. You have a board. Now
let me just ask. You have a board of directors. They are making
policy decisions for this organization for your company, is
that right?
Ms. Gootkind. We have a board of directors that directs the
activity on behalf of the members of the company.
Ms. Waters. So, and all of these people, you checked their
credit backgrounds?
Ms. Gootkind. The different consumer reporting agencies
that are members of our foundation would have their particular
practices. I can tell you that in my company, we do background
checks, yes.
Ms. Waters. Do you know if the credit, have they checked
credit on all of these directors?
Ms. Gootkind. I don't have the information on every
particular member company of the association. I can speak to my
company. We do national security background checks and so
everyone who is a member of my company, an employee in my
company does have to have a credit check done because it is
required by the industry.
Ms. Waters. But you don't know if the board of directors
are credit checked?
Ms. Gootkind. I don't have that information here today.
Ms. Waters. Sometimes, it is instructive and very helpful
if boards are representative of all of the people that they are
making decisions about. Do you think that this board is
representative?
Ms. Gootkind. I would say yes.
Ms. Waters. Why do you think it is representative?
Ms. Gootkind. Again, we are members of the consumer
reporting industry. What we do is we deal with best practices.
We deal with legislative initiatives. We have a brand, it is a
relatively new organization.
Ms. Waters. Do you have diversity on your board?
Ms. Gootkind. Pardon me?
Ms. Waters. Do you have diversity on your board in racial
make up and--
Ms. Gootkind. Diversity in the member organizations.
Ms. Waters. The board of directors. I am looking at and we
have been checking a little bit. And my question is, the Chair-
elect is Theresa Preg.
Ms. Gootkind. Correct.
Ms. Waters. You have the treasurer, Mr. Fred Giles.
Ms. Gootkind. Correct.
Ms. Waters. Noelle Harling is the secretary. Dan Shoemaker
is your past Chair, Bruce Berger, Judy Gootkind, that is you,
Julie Hickman, Nancy Ann Roberts, Christine Cooney, Don
Standwick, Carl McManns, and Dean Corris. Do you have any
African Americans on this board?
Ms. Gootkind. We do not.
Ms. Waters. Do you have any Latinos on this board?
Ms. Gootkind. We do not.
Ms. Waters. Do you have any Asians on this board?
Ms. Gootkind. We do not.
Ms. Waters. How then is it representative of the people
that you are making decisions about?
Ms. Gootkind. Again, these are elected to the board,
individuals who are representative of the consumer reporting
agencies that make up our reporting organizations.
Ms. Waters. So the consumer reporting agencies that make up
your board have sent you representatives who are basically all
White?
Ms. Gootkind. That is correct.
Ms. Waters. I can't hear you.
Ms. Gootkind. That is correct.
Ms. Waters. And we are here today talking about the
problems that are created with the policies of credit checks
for employment. But you have nobody on your board who
represents any of those classes that we are so concerned about;
is that correct?
Ms. Gootkind. That is correct.
Ms. Waters. Thank you very much.
I yield back the balance of my time. How much time did I
have left?
Mr. Cleaver. You have about 25 seconds.
Ms. Waters. Okay. Then I yield back. Thank you.
Mr. Green. I will yield my time.
Mr. Cleaver. Mr. Green is yielding whatever time.
Ms. Waters. Thank you very much. I will just take a minute
here. One of the big three credit bureaus, Experian I think it
is pronounced, touts in its Web site that its employment
screening product, Employment Insight, helps you make better
employee hiring decisions by quickly and cost effectively
providing objective and factual credit information. Credit
information provides insight into an applicant's integrity and
responsibility toward his or her financial obligations.
Do you agree with this statement that credit information
provides insight into an applicant's integrity? Mr. Livingston?
Mr. Livingston. In some circumstances, sure. But I think we
all tend to think about just certain paradigms. But if we were,
for example, doing a background investigation on someone who is
a candidate for a, say, chief financial officer, and we were to
find that this person was routinely late in making payments,
then that might be a factor.
Ms. Waters. Yes, but the question that I am asking is about
the statement of Experian. Do you buy that statement? Do you
concur with that statement?
Mr. Livingston. I don't know that company, and I would
think in many circumstances the statement would not be--
Ms. Waters. Ms. Gootkind, what about you?
Ms. Gootkind. Can you read it again to me, please?
Ms. Waters. One of the big three credit bureaus, Experian,
touts in its Web site that its employment screening product,
Employment Insight, helps you make better employee hiring
decisions by quickly and cost effectively providing objective
and factual credit information. Credit information provides
insight into an applicant's integrity and responsibility toward
his or her financial obligations.
Do you--
Ms. Gootkind. If I could comment, I think that credit
reports are one component of the background investigation.
Ms. Waters. So you don't believe in this statement the way
they have put forth?
Ms. Gootkind. I would say that the credit report is a risk
mitigation tool, but it is also a verification tool that is
used by consumer reporting agencies.
Ms. Waters. Thank you. Ms. Denston?
Ms. Denston. Yes, Congresswoman. I don't know that I agree
with the statement as it is just for credit reports. But I do
know that it is used as a tool.
Ms. Waters. I am just asking about what they say. They said
credit information provides insight into an applicant's
integrity and responsibility toward his or her financial
obligations. Do you believe that?
Ms. Denston. Not so much integrity, but responsibility,
yes.
Ms. Waters. Okay. So you don't believe it. Thank you. And
thank you very much for the time. I yield back.
Mr. Cleaver. The Chair recognizes the gentleman from New
Jersey, Mr. Lance.
Mr. Lance. Thank you, Mr. Chairman. And good morning to you
all. To Mr. Livingston, I am reviewing your testimony. As I
understand the bill, and based upon your written testimony,
exceptions would be provided for those holding jobs with State
and local governmental agencies, national security,
supervisory, managerial, professional or executive
responsibility at financial institutions or when otherwise
required by law.
Number 4 impresses me as being broad in nature. Do you have
any understanding, sir, what that might be criterion for?
Is it your understanding that the current law prohibits
employment discrimination based upon race, religion, creed,
national origin, and other bogus criteria?
Mr. Livingston. Yes, sir. The answer is yes. Federal law
prohibits discrimination on the basis of race and those other
factors.
Mr. Lance. Are there other irrelevant criteria?
As I read these various categories, if one were to seek a
position as the chief financial officer of a hospital, for
example, it does not impress me as coming within any of the
exceptions that I am reading based upon your testimony. Would
that be your understanding as well?
Mr. Livingston. Yes, sir. That would, to look into the
credit history of someone seeking that job would be unlawful
under this legislation.
Mr. Lance. I have, of course, several hospitals in the
district I represent, as do all Members of Congress. And
certainly, if I were on the board of a hospital, as my twin
brother is, I think it would be perfectly legitimate to seek
the credit history of someone applying for the position of the
chief financial officer of a hospital. Can you give me other
examples where it would become illegal to look at the credit
history of a person, other examples, perhaps if not in the
nonprofit sector, in the private sector?
Mr. Livingston. Ms. Gootkind had an extensive list in her
testimony. I was impressed by the number of categories that she
used.
Mr. Lance. Thank you. I therefore defer to Ms. Gootkind.
What were some of those categories?
Ms. Gootkind. We feel that there are industries that use
background checks as well as individual positions that are
being hired for that have responsibility to cash information,
consumers information and things of that nature. I would be
happy to read the list to you again if you want.
Mr. Lance. If you would just briefly highlight several of
the categories.
Ms. Gootkind. Lawyers, mortgage lenders, property managers,
cashiers.
Mr. Lance. Thank you. So, for example, I am an attorney. If
I were to apply for a position in a law firm, it would be
illegal for that law firm to examine my credit history under
the provisions contained in this potential legislation?
Ms. Gootkind. That is correct.
Mr. Lance. Other members of the panel, would you think it
appropriate to use credit as one of the criteria for a chief
financial officer of a hospital or for employment in a law
firm? And I would open it up to the entire panel. Mr. Shelton,
good morning.
Mr. Shelton. Good morning. If you will repeat the question
specifically.
Mr. Lance. Of course, sir. If I were to apply for the
position of the chief financial officer of a hospital.
Mr. Shelton. Yes, can you establish the need? Why indeed
would you need that kind of background information? Would it be
nothing more than just another device to actually exclude many
from consideration? Quite frankly, when I think about our
conditions today and what affects our credit ratings and, quite
frankly, what affects our financial disclosure, we are also
thinking about those of us who took out multiple student loans
to be able to finish our degrees and get our levels of higher
education achieved. And very well indeed what you would be
doing is locking out many who struggled to get from the bottom
to be able to be considered for important positions like this.
I don't see any basis for the need for that kind of
information.
Mr. Lance. So it is your position that you do not see a
need for consideration for the position of chief financial
officer of a hospital?
Mr. Shelton. I would want to know, quite frankly, if they
have the skills to be able to carry out those responsibilities.
I would not like extraneous diversions from the real issues and
concerns of that person's integrity, ability, and that person's
background to be able to fulfill the responsibilities for these
positions. And certainly, I don't see where this kind of
information is helpful at all.
Mr. Lance. Thank you. I appreciate your answer to the
question. I respectfully disagree.
Thank you, Mr. Chairman.
Mr. Cleaver. The Chair recognizes the gentleman from North
Carolina, Mr. Watt.
Mr. Watt. Thank you, Mr. Chairman. We quite often sit in
these hearings and markups and legislative sessions and marvel
at the difference in the backgrounds that people bring to these
deliberations. I don't think I have seen many that reflect that
difference more than this morning's discussion between the
folks on one side of the aisle and the folks on the other side
of the aisle who come from different backgrounds, live in
different worlds, and don't understand the realities of how
things work in the real world that we live in, at least. Maybe
they understand it in the world they live in.
It doesn't take much for me to relate to the need for this
kind of legislation, even based on my own personal experiences
going back to high school when I got a summer job in a small
warehouse, and there were four people working in that
warehouse, all making very, very low wages, but the hardest-
working people I had ever seen in my life. And they were always
in some kind of credit crunch that would ultimately show up on
their credit report, but had nothing to do with their
commitment to the job that they were doing every day for
virtually minimum wages, showing up on their credit report
because they were making virtually minimum wages, and it was
virtually impossible for them to make ends meet.
Fast forward to the time that I practiced law in the law
firm that was litigating Griggs v. Duke Power, which
established the job-relatedness requirement when employers were
taking the same position that some of the witnesses on this
panel are taking, that employers ought to be able to establish
whatever criteria they want to establish, whether it had any
justifiable relationship to the employment that they were
hiring people or not, and the result was that systematically,
Blacks were ending up in the lowest categories, and others were
ending up in the higher categories.
I dare say, Ms. Gootkind, the striking thing about Ms.
Waters' line of questioning, although I thought it was very
personal, I dare say there is not a person on that board who
got on that board having to have had a credit check. That is
just a difference in the worlds that we live in.
So this is something that is hard for me to relate to this
discussion without understanding that we come from different
worlds here.
And so a number of us have been strong advocates for doing
away with this, these credit reports that have adverse impacts
on people's ability to do, to get jobs, have adverse impacts on
their ability to get insurance. I, for the life of me, can't
understand why, how somebody's credit report impacts their
driving ability and their car insurance rates, or the
likelihood that they would have a fire at their home. So it
adversely impacts the rates on their homeowners insurance
policies. There is no relatedness there.
It is just a vicious cycle that takes you back to the very
thing that Mr. Cohen testified about in his opening statement:
That is the way we have always done it, and therefore, we
justify it because we have always done it that way.
And I dare say, just fast forwarding a little bit further,
now that I am in Congress and have Bank of America as one of my
prime corporate constituents, and having heard them be
discussed here in an adverse way, they are probably better off
with this bill because they don't have to worry about whether
they go out and look at some irrelevant criteria that doesn't
have any application to whether they can hire a janitor or a
mail clerk or whatever.
So I am sorry. I didn't mean to get on a soap box here. I
just wanted to--
Mr. Cleaver. If someone wants to yield another--
Mr. Watt. No. I don't want to take anybody else's time
because I would just further pontificate on these different
worlds that we come from. It is striking.
I yield back, Mr. Chairman.
Mr. Cleaver. The Chair recognizes the gentleman from
Georgia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman. Mr. Livingston--
Mr. Livingston. You understand, Mr. Scott, that I am a
Georgian.
Mr. Scott. Oh, very good.
Mr. Livingston. I hope that will provide me some--
Mr. Watt. We will probably hold that against you.
Mr. Scott. That is all the more reason for me to attempt to
illuminate a little on this issue.
First of all, I think we have to understand and look at
this credit report as a discriminatory tool. There is no other
way you can look at it as that. First, I am not necessarily
talking about racial discrimination. Not first. But just by the
very nature that here is a tool in the hands of an interviewer,
prospective employer whose sole purpose is to make a
discriminatory conclusion for a job for which this tool has no,
is no indicator of how successful the individual would be at
performing that job. That is the first part of the
discriminatory tool.
The second one is that it is not required--I don't know,
maybe you can correct me--that everyone who sits before this
interviewer, that this credit card issue, this credit report is
utilized.
The first question then would be, to you, how heavily do
employers typically weigh the credit scores in employment? And
do they use it judiciously, or do they not use it
discriminatorily? For example, this person who sits before
them, they may use the credit report as a tool. Another person
coming before them, they may not. It is all subjective. So when
you look at all of the ramifications of why this is so wrong,
it is a discriminatory tool on so many different levels that it
is paramount, the paramount reason why we feel it is so
unjustified and so unfair.
So specifically, my first point to you is, how heavily do
employers weigh credit scores in employment? What do they do
with this when they get it?
A man got behind on his payments and got into a little
trouble. What do they do with this? How does that weigh in the
decision?
Mr. Livingston. It depends on the job. The employers who
are members of the U.S. Chamber put in safeguards to try to
protect the applicant or the employee from purposeful
discrimination, from disparate treatment, from decisions which
are made based upon the protective classification to make sure
that everybody similarly situated is treated the same way with
respect to their credit history information.
The difficulty, the primary difficulty that I have with the
bill is that it just doesn't address only the janitor that Mr.
Watt was referring to. It also throws out the employer's
ability to look into the way that the potential CFO has managed
his or her own finances. The hospital that doesn't want someone
managing the finances of the hospital who has already proved to
be irresponsible in managing their own money.
Mr. Scott. But isn't the decision to use this criteria done
on a case-by-case basis? Does every single person coming before
for employment go through this?
Mr. Livingston. No. There are actually two parts to that. I
think that one of the panelists has already testified,
consistent with my own experience, that the background
investigation occurs after the individual has already received
a conditional offer of employment. So not every applicant would
be subject to a credit screening. And then, based on my own
experience, only with respect to those positions for which a
credit screening might be relevant. Lots of the positions that
we have talked about here today, in my experience, are not
subject to a credit screen. When the position itself is subject
to a credit screen, then everyone who receives a conditional
offer of employment for that position gets the screen.
Mr. Scott. But doesn't it vary between that--my time?
Mr. Cleaver. We have two additional persons to ask
questions, and because we have a small group here, if it would
please the members and if the witnesses are willing to wait
around, we could go through one more round of 2\1/2\ minutes.
Mr. Scott. You are the chairman, Mr. Chairman.
Mr. Cleaver. The Chair recognizes the gentleman from Texas,
Mr. Green.
Mr. Green. Thank you, Mr. Chairman. I thank the witnesses
for appearing today. And it is a difficult subject for those of
us who have sat in the back of the bus, had to go to the back
door, were forced to sit in the balcony of the movie, last
hired, first fired. It is a difficult topic for us to embrace
without some degree of emoting. If you only knew what we think,
and I thank God that our thoughts are private. That is one of
the great gifts that God has given humankind, the ability to
secret your thoughts.
So, I have a question: Does anyone really think that
African Americans and minorities are inherently persons who
merit poor credit scores? If so, would you kindly raise your
hand? We will call this the voir dire or voir dire portion of
this hearing, depends on where you are from. It is a French
term, and lawyers know that it means to speak the truth. Does
anyone really think that there is an inherent factor here that
causes minorities and persons of color to have bad credit
scores?
I didn't think anyone did.
So then the question becomes, why do they seem to have
credit scores that are higher or lower and in this case lower?
Why are they lower? Why are they consistently lower? What has
happened in their lives to cause their scores to be
consistently lower? What happened?
Are they just bad people who don't care about credit? I
think not, and I am confident that you would agree with me. So
what happened?
I am going to ask my friend, the lawyer from Georgia, what
happened to Black people? Why is it that their unemployment
rate is always twice that of White unemployment? Consistently.
Check the numbers. Consistently twice or more than White
unemployment. What happened to them? What happened, sir? Help
me.
Mr. Livingston. Mr. Green, I think that the majority of
persons who are denied employment based upon credit screenings
are White. Now, I believe that--
Mr. Green. If I may intercede--
Mr. Cleaver. Let me interrupt everybody. Please move the
microphone. Our technician is having difficulty picking up your
voice.
Mr. Green. Excuse me, since I control the time, and I beg
your indulgence. But you see, unfortunately, I too have been
trained, and when you say the majority, I immediately
understand that we are not talking about majority as much as we
are talking about percentages of a given group.
Mr. Livingston. Right. I am not trying to be clever. I am
just trying to--
Mr. Green. Whether you are trying to be clever or not, the
answer is one that has to be addressed. You see, ``most'' does
not mean that the higher percentage exists compared to the
number of Whites in the country.
Mr. Livingston. Indeed. Generally, a higher percentage of
Blacks, as compared to--
Mr. Green. And that is what we are talking about. Listen
now. We are both going to acknowledge our intelligence today.
On this day, you and I are going to acknowledge that we both
understand how to use the king's language.
Mr. Livingston. Indeed.
Mr. Green. And it was imposed on me, but I still embraced
it. And I am ready to do battle with whomever comes forward,
and you and I are here today, my brother. So explain to me, why
are Black people in this shape that they are in with credit,
with reference to their credit scores.
Mr. Livingston. I couldn't explain that to you, Mr. Green.
But I do say that you have no argument with me over this issue.
Mr. Green. Let me just ask you this, since you say you
can't explain. Good, I am glad you said that because listen
now. Let me just share this with you. Mr. Cohen, whom I must
tell you I gained a great amount of respect for today, Mr.
Cohen gave us a plausible answer. He used the term
``institutionalized racism,'' a term that many persons of color
are reluctant to use because of the way we have to then find
ourselves dealing with those who will simply just dismiss us
out of hand. But I am glad he said it. He has the ``hue''
power, if you will, to say it and get away with it. But I want
to just--
Mr. Cleaver. The gentleman's time is up, but he has an
extra 1\1/2\ minutes because he yielded.
Mr. Green. Just listen to this point. He said
``institutionalized.'' ``Institutionalized,'' as dastardly as
it is, is not nearly as dastardly and invidious as
``legalized.'' This is legalized, and it has always been the
intelligentsia that was able to perpetuate and perpetrate
legalized invidious discrimination. Dred Scott was produced by
the intelligentsia. This that we try to right today, which is
wrong, the intelligentsia perpetuates.
I am just going to beg of you, give some thought to those
of us who have had this history. And we don't come here because
we just simply want to make things difficult for people. It is
a history that you cannot imagine how it has impacted us.
So these hearings are difficult for some of us. And I close
with the simple comment to all of you, and I appreciate you.
Please understand that we support the same Constitution you
support, believe in it the same way you do, except that we can
recognize a wrong that ought to be righted, and that is what we
are trying to do today.
I will yield back the time that I don't have. And I thank
you for being so kind, Mr. Chairman. Thank you.
Mr. Cleaver. Mr. Lance, we are going to give another 2\1/2\
minutes, if you have a question.
Mr. Lance. Thank you, Mr. Chairman.
Mr. Cleaver. We don't discriminate, so we want to make sure
that both sides have opportunities here.
Mr. Lance. Thank you. And in my view, Dred Scott was based
upon an erroneous decision of Roger Taney and eloquently
opposed by Abraham Lincoln.
Regarding the testimony of Ms. Wu, I read with interest and
I certainly agree that if there has been erroneous rates of
credit, inaccurate rates, that is something that we should
address. And as I read your testimony, there is a study ongoing
now regarding that?
Ms. Wu. The Federal Trade Commission is required under the
2003 Fair and Accurate Credit Transactions Act that amended the
Fair Credit Reporting Act to conduct a study of accuracy in
credit reports. It is a long study. They have engaged in two
pilots already. The data from the two pilots is what is in my
testimony, showing error rates in credit reports that I think
are significant.
Mr. Lance. And will there be a final report at some point
in the immediate future?
Ms. Wu. As I understand it, and this may be a question
better directed to the Federal Trade Commission, the study is
ongoing. It is nationwide. They do expect to have a final, a
statistically significant study in the next few years. I have
heard within a few years, but I would be happy to find out more
for you.
Mr. Lance. Thank you. And through the Chair, I think that
this is an area that we should investigate and certainly I
would like to work in a bipartisan capacity with members of the
committee so that the rates of error are reduced or I would
hope eventually eliminated, and certainly none of us favors a
system where there is significant rates of error.
Thank you, Mr. Chairman.
Mr. Cleaver. Thank you. We have--Ms. Denston, are you an
attorney as well? Are you, Ms. Gootkind? Mr. Livingston, I
guess you are.
I want to deal with the issues that my colleague Mr. Green
mentioned earlier about when he actually quoted from Mr. Cohen
about unintentional but still brutal discrimination, vicious
discrimination. You agree that there is discrimination?
Mr. Livingston. Yes, sir.
Mr. Cleaver. Okay. Here is--maybe you can look at this. Is
it legal to deny a person employment if they have filed
bankruptcy?
Mr. Livingston. I believe that it is illegal to use
bankruptcy as a basis for an employment decision. But I don't
know for certain.
Mr. Cleaver. Okay. I know for certain. You cannot exclude a
person from employment based on bankruptcy. But it is a moot
point. If you file for bankruptcy, the chances are you didn't
pay, you were having difficulty paying your bills. You probably
didn't have a job. So it doesn't matter. Somebody can say, in
an interview, I filed for bankruptcy, or show that they filed
for bankruptcy, an employer can say, we absolutely will not
discriminate against you because of the bankruptcy. But the
employer automatically knows that the credit is bad. Do you
agree with me?
Mr. Livingston. I think that we end up, we ended up in this
hearing sort of talking around one another. I agree with most
of what has been said.
Mr. Cleaver. Okay. I don't want to talk around it. So if
you can help me, I will go straight to it.
Mr. Livingston. Some decisions to deny persons employment
on the basis of credit history are unlawful under Title VII
now.
Mr. Cleaver. Yes.
Mr. Livingston. Unless the employer can prove that the
decision was job related for the specific job being sought by
the applicant. So lots of the examples that I am asked if I
agree with, I do agree with. My point is that it is illegal now
and that the current law permits for there to be some
flexibility so that, as Mr. Lance pointed out, an employer may
be permitted to look into the credit background of the person
who seeks to be the chief financial officer of the hospital,
but might not be able to consider the credit history of someone
who is seeking a position as a janitor, to draw two extreme
examples.
Mr. Cleaver. But you used the word earlier, and I wrote it
down, ``irresponsible.''
Mr. Livingston. If I was using it, I was using it with
respect to the CFO example, chief financial officer example,
and using, and looking, and asking in some ways rhetorically,
wouldn't it be job related for an employer to consider if the
candidate for that senior position, managing the finances of
the company, was having difficulty managing his or her own
finances. I wasn't making that reference with respect to lower
level jobs where it would be less likely that the employer
could prevail under discrimination laws.
Bank of America is a good example. Bank of America, based
on upon what I have heard in this hearing today, lost it under
current law, which precluded them from considering the credit
histories in whatever job was at issue.
Mr. Cleaver. So you are concluding that this legislation is
completely unnecessary because there is already existing law?
Mr. Livingston. I said in my testimony that I believe that
the existing law works better than what would replace it, which
would be this bill, yes, sir.
Mr. Cleaver. Why?
Mr. Livingston. Because this bill throws out, it
encompasses all situations, including those situations where
under current law, an employer may be able to show that the
consideration of certain factors in a person's credit history
were related to the job that the person sought. And a good
example I continue to return to is the example offered by Mr.
Lance, Congressman Lance, that dealt with the CFO of a
hospital.
Under current law, the employer would have an opportunity
to demonstrate that person's credit history was relevant to the
position and possibly could win. Under the bill, the hospital
would have no opportunity to make that showing. The hospital
would not be allowed to consider that information.
Mr. Cleaver. But do you understand, and Mr. Watt tried, and
maybe he failed, so I probably will fail as well. Can you
struggle, struggle, struggle to see that there are individuals
who are in fact discriminated against, and if you, in the
throes of a recession have discrimination, that you would say
it is not based on color, but based on their ability to pay on
time and not come across as irresponsible. And if you look at
all of the statistics, Mr. Shelton was one who testified before
our committee. I think it is inevitable that minorities were
pushed towards exotic loans. Do any of you disagree with me?
The facts.
Mr. Livingston. I passionately agree with the principles of
equal employment opportunity in Title VII.
Mr. Cleaver. But then we have to be as aggressively trying
to make sure that people are not discriminated against as we
are in a number of other arenas. All of a sudden, it is almost
like we have solved all of the problems, and there is no
discrimination, so let's just keep going the way we are going.
That is not the real world that we are in. And there are
people, through no fault of their own, today, who are
struggling just to make it, some of the 99ers who have gotten
off the unemployment benefits and they are just out here in the
world. They are not even in the numbers that Mr. Shelton
mentioned, the 9.6, the 7.1, the 12.0. They are not even in
there. It is probably up in the 20s. And these people are going
out trying to get a job. They can't get a job because somebody
pushed them into an exotic loan.
My time is way past up. I am going to recognize the
gentleman from Georgia.
Mr. Scott. Thank you, Mr. Chairman. And I want to just say,
Dred Scott was mentioned, and many of you may know that Dred
Scott is my great-great-grand uncle. And it is a joy to have
his spirit mentioned because it is his spirit that we are
dealing with here today.
The great evolving decision that opened up the major wound
of this country emanated from the Dred Scott decision as to
whether a portion of this country or a State would be free or
slave. And that is why I think you hear the passion from us who
are descendents of people who have suffered because of the
pangs of color shock.
Now, Mr. Livingston, I want to come back to you because I
want to give an example of this, why I say we all have to see
out of the same lenses in order to grab this picture.
When the chairman asked, why do you oppose this, and I
understand because I feel that you are basically understanding
of this. But it is very simple to point out something. He asked
you that and you responded, let me give you this example why I
am against this bill. I think because of a CFO of a hospital.
And clearly, in the bill, how the language reads, that there
are exemptions in this bill, including jobs that require
national security, FDC clearance, jobs with a State or local
government agency, that specifically require credit check or
employment that is supervisory, managerial, professional,
executive level at a financial institution or is otherwise
specifically required by law. Almost a loophole in this bill
that you could drive 20 Mack trucks through. Surely, within
here, a CFO of a hospital--Grady Hospital should have this. You
are from Georgia. You know Grady Hospital. You know the trouble
we went through.
I agree with you they ought to have checks on that. These
are guys who are handling a lot of different money from State,
local, and Federal Governments.
So the reason of opposition to this bill is on something
else that we were talking about, is the fact that this
requirement is a major discriminatory barrier that is a target
of people who come automatically there and they saw you coming.
That is why I asked you about case by case.
There are certain things, if they see a Black man coming,
sitting down, there is a whole different thing going through
this person's mind. That is why African-American males right
now in the cities of the United States are hovering at 50
percent unemployment. They see them coming. He doesn't have a
job. If he doesn't have a job, you know he can't pay his bills.
But he's trying to get a job.
And this darn thing is sitting up there for them to use as
a discriminatory tool that he can't get the job. He has a bad
credit report. He can't pay his bills. He can't pay his bills
because he can't get a job. This man said you can't get a job
because you can't pay your bills. There is a catch-22, and it
needs to be dissected out.
So I wanted to explain that to you so you could see where
and how this is a major discriminatory tool. That is why I
wanted to ask how much weight you give to this, who it is
applied to. But, clearly, if a person has been unemployed for
some time, they have trouble paying their bills, and then they
get this negative effect of credit scores. This is truly a
consideration of credit scores for employment that is
counterproductive.
You can see that, can't you? Can't you see that, how it is
counterproductive?
Mr. Livingston. I can see that the use of credit scores in
many contexts discriminates on the basis of minorities, and my
testimony pertains to the employment arena, which is what we
are talking about. There are laws, powerful laws, which
currently exist that deal with this issue and they work, while
at the same time giving employers flexibility to deal with
these more--these other situations that I think we--I think we
agree. It sounds like we agree that there should be these other
exceptions.
Mr. Scott. But I want to make sure that your point is
covered within the exemptions here and that the fact that as
this bill moves along, if it is not clear, we will make these
exemptions clear. The exemptions are clearly--this isn't the
purpose of the bill. A man gets to the point where he is being
qualified for the top financial officer or CEO of a major
hospital--this is going to try to help people who are being
discriminated against already, who come to the point of wanting
the job they are discriminated against.
Mr. Shelton, I wanted to ask you, because I think that you
can get right to it and explain to us how the use of credit
scores as a hiring criteria disproportionately discriminates
against minorities.
Mr. Shelton. Let me first start off by saying the biggest
challenge that we have is to talk about credit scores. Credit
scores are oftentimes a component thereof of a credit report
but credit scores separately of a credit report is that you
really don't know.
Now the reason I put it in those terms is because whenever
we have talked to the FICOs of the world and other credit
scoring companies about what exactly goes into the credit
scoring process, they are unable to tell us. They are unwilling
to tell us. They will state that we can tell you generally that
we are looking at your payment history, we are looking at any
mortgages you have held, we are looking at your background and
so forth. But when you ask specifically, how do you come up
with the scoring, they will say we can't tell you because it is
proprietary. In other words, meaning a black box that locks you
out of that process.
As a matter of fact, we have also seen very specifically is
oftentimes African Americans, with the same background, the
same history of payments, the same educational level of
attainment, even the same salary ranges find themselves with
lower scores than White Americans in the same boat. As a matter
of fact, the Center for Responsible Lending and a few others
have taken a good look at this issue and very clearly indicated
to us there is discrimination in this process.
Again, as you talk to the people who manage this, they will
tell you, this is our business and because this is our business
we can't tell you exactly how we do the mathematics, but
somehow, magically, African Americans score much lower.
Mr. Scott. Okay. Thank you, Mr. Chairman.
Mr. Cleaver. I recognize the gentleman from Texas, Mr.
Green.
Mr. Green. Thank you, Mr. Chairman.
Mr. Livingston, I want to make this conspicuously clear. I
love you. I hold no ill feelings toward you. I would be honored
if we could have lunch or dinner at my cost. It is not about
you.
And, Ms. Gootkind, because you are the person that I would
be talking to next, I extend the same invitation to you as
well. I love you, too.
Now, Mr. Livingston, before we conclude and I go to Ms.
Gootkind, let me just ask you a question. Is there a
requirement that you check the credit history of that CEO or
that hospital person that we have been talking about? Is there
a requirement that you do it?
Mr. Livingston. Is there a legal requirement? I don't know.
Mr. Green. I can tell you. There is no requirement that you
check it. You may if you choose; and given that you don't have
to check the history, you now put the person who may be
discriminated against who had the credit concerns in the
position of having to sue to prove that this invidious
discrimination took place, and the person, as has been
indicated by the testimony I believe of Mr.--I am not sure
whether it was--was it Mr. Klein? I can't see. Let me just see
your name. Mr. Klein.
People don't know always know they have been discriminated
against. It puts them in the rather awkward position of having
to do the discovery of some sort to find out they actually have
a lawsuit. I guess they can go to the EEOC if they have enough
understanding about what is going on to do so. But it is an
awful burden. It costs a lot of money to engage in what we call
long-term litigation, and that is what it is. It is not
resolved overnight or right away.
So you put the person who is being discriminated against in
a position of having to expend a large sum of money or find a
means by which some lawyer who sees that as his mission or her
mission in life to help people to do this. It is a tough
position to be in when you have to prove that you have been
discriminated against. It really is difficult. Assuming that
remedy works, it is a very expensive remedy for people to
prove.
Ms. Gootkind, am I pronouncing your name correctly, ma'am?
Ms. Gootkind. ``Gootkind.''
Mr. Green. ``Gootkind,'' excuse me.
Ms. Gootkind, I just want to leave you with a thought
because you are in a position to go back to your board and say
to them we need to take another look at ourselves. You have an
opportunity to do some good. Go back to the board and tell them
that at this hearing, it was made rather clear to me that there
are some people who look upon us with an eye of suspicion
because we don't have the diversity that some people think that
we should have.
There is something we say around here that might apply to
your circumstance. I have heard it stated in many quarters if
you are not at the table--and those people who are on your
board are at the table--if you are not at the table, you are on
the menu. Seems like a lot of what you talk about has to do
with people who are not at the table. So they are at least on
the agenda which some people call the menu.
So I look forward to either of you accepting my invitation
for lunch, and I hope you love me as much as I love you. I
yield back.
Mr. Cleaver. One final question, Ms. Denston. Your
testimony caught me by some surprise. I love you, too, Mr.
Scott, as you are leaving. Thank you.
Ms. Denston, you said that you didn't know whether or not
the use of credit reports for employment purposes has increased
over the past decade, which is fine, and you added because you
don't track those numbers.
Ms. Denston. The use of credit reports has not increased
from our survey back in 2004. In 2004, it was at 61 percent of
the selected candidates, and the survey that was took place,
the one that was released in 2010, was at 60 percent.
Mr. Cleaver. Okay. Has your industry increased in size in
the past decade?
Ms. Denston. I am not aware of those figures. I cannot
answer that question. I would have no--
Mr. Cleaver. Has the volume of sales and contracts in your
industry increased over the past decade?
Ms. Denston. Again, I cannot answer that question. I don't
have that information, but we can get back to you on that.
Mr. Cleaver. Okay. You wouldn't be in business if you had
not increased.
Ms. Denston. I can only speak--I work for a private
individual, and SHRM is an organization I belong to.
Mr. Cleaver. Okay.
Ms. Denston. I don't understand your question.
Mr. Cleaver. The question is, you were saying that you
didn't know if the credit reports for employment purposes had
increased, and one of the questions I asked is, has your
industry increased the volume of sales and contracts? Because
if everything is increasing, then you are hiring more people,
and then you are looking at more credit reports.
Ms. Denston. Okay. I do understand that question. But I
don't have those figures. I cannot answer that question. I do
not know. I cannot give you an intelligent answer.
Mr. Cleaver. Okay. All right. Thank you. Let me thank all
of you, all the witnesses. We love all of you.
The Chair notes that some members may have additional
questions for the witnesses which they may wish to submit in
writing. Therefore, without objection, the hearing record will
remain open for 30 days for members to submit written questions
to the witnesses and to place their responses in the record.
If no other comments, this subcommittee is adjourned.
[Whereupon, at 12:12 p.m., the hearing was adjourned.]
A P P E N D I X
September 23, 2010