Connecticut has added mortgage brokers, lenders, and servicing companies to the list of “financial institutions” exempted under the state’s existing law limiting credit checks for purposes of employment. The amendment, which took effect on October 1, allows these institutions to inquire into and otherwise consider an applicant’s or employee’s credit history in hiring and personnel decisions.
Connecticut’s law already provides exemptions for several other financial institutions, including certain banks, savings and loan associations, credit unions, insurance companies, investment advisors, broker-dealers or entities otherwise registered with the Securities Exchange Commission. The existing law also allows inquiries into credit (i) if required by law, (ii) where an employer has reason to believe that an employee violated the law with respect to his or her employment, or (iii) when it is “substantially related to the employee’s current or potential job.”
California, Colorado, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, Chicago, and Madison (WI) have similar laws to Connecticut’s with varying exceptions. Connecticut’s law stands in stark contrast to the proposed New York City credit check ban that would altogether prohibit employers from running credit checks unless required by law. For more on the NYC proposal, see our prior blog post.