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EEOC Informal Discussion Letter

The U.S. Equal Employment Opportunity Commission

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.

Title VII: Employer Use of Credit Checks

March 9, 2010


Dear ____:

In your recent letter to Acting Chairman Stuart J. Ishimaru, you discuss employers’ use of credit checks to screen job applicants, and you urge that legislation be passed to prohibit this practice. Acting Chairman Ishimaru has asked our office to respond directly to you.

Initially, we note that the Equal Employment Opportunity Commission (EEOC) has no authority to enact legislation to prohibit employer credit checks. You may wish to contact the U.S. Senators for your state or the Representative for your congressional district to urge passage of federal legislation specifically targeting employer credit checks.

The Equal Employment Opportunity Commission (EEOC) enforces Title VII of the Civil Rights Act of 1964 (Title VII), as amended, 42 U.S.C. § 2000e et seq., which prohibits discrimination on the basis of race, color, sex, religion, or national origin; the Age Discrimination in Employment Act of 1967 (ADEA), as amended, 29 U.S.C. § 621 et seq., which protects individuals age 40 or older from employment discrimination because of age; Title I of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. § 12101 et seq., which bars employment discrimination against qualified individuals with disabilities on the basis of disability; the Equal Pay Act, 29 U.S.C. § 206(d)(1), which prohibits sex-based wage discrimination; and Title II of the Genetic Information Nondiscrimination Act, 42 U.S.C. §  2000ff et seq., which prohibits discrimination based on genetic information.

While none of these laws directly prohibit discrimination based on credit information, they may be implicated in some circumstances. In particular, Title VII prohibits an employment practice that disproportionately screens out racial minorities, women, or another protected group unless the practice is job related and consistent with business necessity. Thus, if an employer’s use of credit information disproportionately excludes African-American and Hispanic candidates, the practice would be unlawful unless the employer could establish that the practice is needed for it to operate safely or efficiently. At an EEOC meeting in May 2007 on employment testing and screening, attorney Adam Klein testified that credit checks have not been shown to be a valid measure of job performance. Testimony of Adam T. Klein, Esq., EEOC Commission Meeting (May 17, 2007), Some courts, however, have determined that credit checks are appropriate for certain positions, such as where an employee handles large amounts of cash. See EEOC v. United Virginia Bank/Seaboard Nat’l, 1977 WL 15340, 21 FEP Cases 1392 (E.D. Va. 1977) (even if the defendant bank’s credit check policy disproportionately screened out African-American job applicants, the bank had a business need to conduct pre-employment credit checks because employees handle large amounts of cash).

If you believe that you have been subjected to employment discrimination, you may file a discrimination charge with the EEOC. Charges must be filed within 180 days of the alleged discrimination or 300 days if the charge also is covered by a state or local anti-discrimination law. You may reach the EEOC field office nearest you by calling 1-800-669-4000 (voice) or 1-800-669-6820 (TTY).

We hope that this information is helpful. Please note that this letter does not constitute a written opinion or interpretation of the EEOC within the meaning of section 713(b) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-12(b).


Dianna B. Johnston
Assistant Legal Counsel

This page was last modified on March 29, 2010.

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