THE FAIR CREDIT REPORTING ACT - TIME FOR EMPLOYERS TO CHANGE THEIR USE OF CREDIT INFORMATION

On September 30, 1997, the Consumer Credit Reporting Reform Act of 199 6, including the Fair Credit Reporting Act (FCRA) 15 USC Sections 1681 -1681u (Supp. 1998),(1) became law. The FCRA created substantial new o bligations for employers that use credit reports for assessing job app licants and making other employment decisions. The FCRA complicates th e use of credit reports in employment decisions and job actions and pl aces affirmative obligations on employers that reject applicants based upon information contained in a credit reports. This article begins b y providing an overview of the law and its recent amendments and revie ws in-depth the new legal issues facing employers. This article also o ffers some practical guidance, including information from the Federal Trade Commission, for those employers that insist on continuing to use credit as part of their employment decisions. The conclusion of this article is simple: Employers should seriously consider whether to use credit reports at all, except for the most sensitive of positions. Tho se who do must promptly establish procedures to comply with the FCRA.