Cranston resident Judith Gootkind recently appeared before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit in Washington, D.C., to testify against proposed legislation that, among other things, would limit the use of credit reports for employment purposes. Gootkind is vice president of Creative Services Inc., a pre-employment screening company, and she is a board member of the National Association of Professional Background Screeners. She answered five questions about the legislation, otherwise known as H.R. 3149.
PBN: Why do you and the National Association of Professional Background Screeners oppose H.R. 3149?
GOOTKIND: The major concern with H.R. 3149 is the restrictive nature of the proposed legislation. There are many sensitive positions which would be precluded from screening where prospective employees would have access to assets, funds and individuals’ personally identifiable information or could be susceptible to bribery or coercion. This legislation would prohibit employers from using credit reports even if there is a Bone Fide Occupational Qualification. NAPBS supports responsible and appropriate use of credit reports in the hiring process when there is relevancy to the position. H.R. 3149 is too limiting in that regard.
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PBN: Are there any provisions of H.R. 3149 that the NAPBS does support?
GOOTKIND: The Equal Employment for All Act allows for exceptions for specific positions which translate into value for use of credit reports in certain instances. As an example, Creative Services Inc. conducts national-security-access-authorization investigations into the protected area of nuclear power plants based on NRC guidelines. A credit report is required for these investigations with a stated goal of determining a subject’s reliability and trustworthiness. National security and Federal Deposit Insurance Corporation clearances of that nature and industry-specific regulations that include the use of credit reports are provided for in the bill, along with high-level positions at financial institutions and government agencies. There is support for the relevance of these searches.
PBN: Why were you invited to testify?
GOOTKIND: Members of NAPBS work collectively and diligently to educate legislators about matters that affect our industry and our clients. We have worked with Rep. Barney Frank, chairman of the House Financial Services Committee, as well as Rep. Luis Gutierrez, chairman of the Financial Institutions and Consumer Credit Subcommittee, on H.R. 3149. During these discussions, we were successful in raising awareness about our concerns, and as a result, we were invited to testify at the U.S. House of Representatives Congressional hearing. This was the first time that NAPBS was so recognized and an important accomplishment in our short history as an association, which began in 2003. CSI is a founding member of NAPBS, and our operations team has been very active with the association in developing best practices and participating in legislative initiatives that effect Consumer Reporting Agencies and our end-user clients. I was a co-chair of the government relations committee and now serve on the board of directors. I have testified on many state issues, such as criminal offender record information reform in Massachusetts, private investigator licensing for CRAs in Connecticut and redaction of personal information in electronic court records in Rhode Island. With that experience, I became a suitable candidate to represent NAPBS at the hearing. A goal of the association is to foster awareness of the Fair Credit Reporting Act as well as educate clients and legislators about the facts and myths of consumer reports. For example, a major area of confusion surrounding credit reports is credit “scoring,” which is used for credit granting but is not included in the credit history reports that CRAs provide to their end user clients for the purpose of employment screening. A second misnomer is that credit reports are widely used in the background screening process. At CSI, 13.3 percent of all unregulated background investigations contain credit reports. The continuous efforts of members of NAPBS to clarify and educate about our industry and the service we provide is what brought us to the table.
PBN: Why is a credit report important in employment screenings?
GOOTKIND: A credit report is a risk mitigation, as well as a verification tool. It is one component of many that can be provided in a background investigation. As a CRA, CSI can provide our clients with information on employment, education and military history, licenses and credentials, government debarment lists, sex offender and criminal history records to name a few. This process is based on permissible purpose as regulated by the Fair Credit Reporting Act with full disclosure and consumer consent. The credit report provides names associated with a Social Security number along with correlating address and employment history. If you compare the credit report to the consumer’s resume or application you can verify the accuracy of the information provided. In addition to the verification aspect of credit reports, it provides payment history and total debt. There are many reasons why an individual’s credit report might be adverse. The human resource community is aware of the follow up that should take place with an applicant. CSI educates our end-user clients to give their applicants the opportunity to explain information contained in their reports to a potential employer. There are also reports that surface adverse consumer information without good reason and these should be reviewed for broader issues in conjunction with all other elements of the background investigation.
PBN: Do you think the House Financial Services subcommittee was receptive? What’s the likelihood of its passage?
GOOTKIND: Yes, I feel that there was enough interest in the points raised by our industry to consider how the bill could be changed or in fact determine if there is a need for this type of legislation at all. We are highly regulated by the Fair Credit Reporting Act under the Federal Trade Commission and the newly created Bureau of Consumer Financial Protection. In addition, employers must adhere to Title VII and regulation that dictates fair hiring practices in the workplace. We have a system that works. As legislators become educated and acquire a better understanding of the process, the need for legislation of this kind will dissipate.
Given the legislative calendar for the remainder of this Congress, it would appear to be difficult to pass this legislation in both chambers. Both the Senate and House of Representatives have adjourned until Nov. 15, when they will return for a lame-duck session. Upon their return, the legislative agenda and calendar for the last few weeks of the 111th Congress will depend in large part on who wins the elections.
