D.C. – New Law Banning Credit Inquiries
The District of Columbia Council has passed a law that bans employers from inquiring into, request or using an applicant’s or employee’s credit information, or from taking employment action based on such information. “Credit information” is defined as “any written, oral, or other communication of information bearing on an employee’s creditworthiness, credit standing, credit capacity, or credit history.” The affected methods of inquiry include application forms, interviews and credit history checks. An amendment to the law provides for several exemptions applicable to private employers:
- Where D.C. law requires an employer to require, request, suggest or cause any employee to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information.
- Where an employee is required to possess a security clearance under D.C. law.
- Financial institutions, where the position involves access to personal financial information.
- Where an employer requests or receives credit information pursuant to a lawful subpoena, court order, or law enforcement investigation.
The law imposes a penalty of $1000 for a first violation, $2500 for a second violation, and $5000 for subsequent violations. The law will take effect following the Mayor’s approval, a 30-day period of Congressional review, and publication in the District of Columbia Register.