On August 10, 2010, Illinois Governor Pat Quinn signed the Employee Credit Privacy Act (the “Act”) into law. The Act, which takes effect on January 1, 2011, prohibits most Illinois employers from inquiring about or using the credit history of a job applicant or employee as a consideration in making most employment decisions, including those involving recruitment, hiring, placement, discharge or compensation. The Act also prohibits an employer from retaliating or discriminating against a person who files a complaint or participates in an investigation relating to an alleged violation of the Act.

Exemptions in Limited Circumstances

Although the Act generally bars the inquiry into or the reliance on an individual’s credit history, it does carve out two notable exemptions. First, it specifically excludes from the definition of “employer” certain groups of employers. Under the Act, financial institutions, insurers, public employers and debt collectors are not considered employers, and thus are not subject to the limitations the Act imposes.

Second, even as to covered employers, the Act does not entirely prohibit inquiry about or employment decisions based on a job applicant’s or employee’s credit history. Inquiries about or reliance on credit history is permitted if a good credit history is an established bona fide occupational requirement of a particular position. But “a satisfactory credit history is not a bona-fide occupational requirement unless at least one of the following circumstances is present”: (1) state or federal law requires bonding or other security covering the employee; (2) the duties of the position include custody of or unsupervised access to $2,500 or more in cash or other marketable assets; (3) the employee will have signatory power over business assets of $100 or more per transaction; (4) the employee will have managerial authority that involves setting the direction or control of the business; (5) the employee will have access to personal or confidential information, financial information, trade secrets, or state or national security information; (6) the position is one for which federal and state regulations provide that a credit history check is a bona fide occupational requirement; or (7) the employee’s or applicant’s credit history is otherwise required by or exempt under federal or state law.


The Act is enforced through private lawsuits. A person who claims to be injured by a violation of the Act may bring a civil action in Illinois circuit court to obtain injunctive relief, damages, or both. The Act also specifically authorizes recovery of costs and reasonable attorneys’ fees to a prevailing plaintiff.


Employers must evaluate their background check processes and make sure those practices comply with the Act. Those employers who are expressly excluded from the Act’s definition of employer should nonetheless exercise caution before relying on credit history information to make employment decisions with respect to employees who are not involved in their core operations, such as custodians. Even though such decisions will not violate the Act, they may be found to have a disparate impact and create the risk of discrimination lawsuits.

Employers who are covered by the Act should seek legal advice as to whether credit history would be a bona fide occupational qualification for a particular position before making credit history inquiries for applicants for or employees in that position.

Finally, and more generally, many employers conduct background investigations through consumer reporting agencies that are subject to the federal Fair Credit Reporting Act. Employers should make sure that such background checks do not include credit history inquiries unless those inquires comply with the Act.