State of Ohio Moves to Ban Credit Reports

Nick Fishman

Ohio State Representative Alicia Reece, D-Cincinnatti has proposed a bill that would prohibits an employer from taking  adverse employment actions  based upon a consumer report or investigative consumer report if the report contains information concerning the person’s consumer creditworthiness, credit standing, or credit capacity.

And unlike similar recently adopted laws in Illinois and Maryland that are laden with exemptions, House Bill 131 exempts from the bill’s prohibition only if the position of employment is a supervisory, managerial, professional, or executive position at a financial institution.

When asked why the law was necessary, Representative Reece said, “House Bill 131 is needed because nearly 65 percent of employers now use credit checks during the hiring process.”

I respectfully suggest that the congresswoman revisit that statistic as she is most likely reacting to last year’s SHRM study which did indeed point out that 65% of all employers consider credit reports.  However, the same study found that only 13% evaluated credit on all employees.  And it is generally assumed that most of that 13% were either required to do so by state of national regulation.  She also might check out our most recent background screening market trends survey which pointed at that nearly 85% of respondents ranked credit reports as either not very or the least important factor in their hiring decision.

If passed, Ohio would join Hawaii, Illinois, Maryland, Washington and Oregon as the only states with prohibitions on employment credit reports.  As always, we would encourage employers that conduct background checks in Ohio to voice their concerns with their elected representatives.

We’ll keep a close eye on this proposed law and report back when we know more.

Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
Nick Fishman
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  • John Ulzheimer

    Nice piece Nick. And with all due respect to the Congresswoman…the reason she introduced the bill is because she wants to get re-elected.

    “Because 65% of employers consider credit reports” isn’t a reason to legislate it into non-existence. What about “100% of lenders use credit reports.” Should that be outlawed next?

    I personally sat through Congressional and House testimony late last year and was appalled at the lack of facts re: credit and employment. Most of the time was spent complaining that credit scores are “costing my constituents job”, which is a practice, of course, that doesn’t even exist.

  • Nick Fishman

    Great point John. That credit score thing always makes me cringe. As I mentioned in a comment on the California update, this is purely a populist issue built around anecdotal evidence and the misuse of so-called facts.

  • Tony Seegers


    Good article. There are several of these types of bills. One would prohibit employers from asking if the applicant had been convicted of a felony. One credit check prohibition bill in the Ohio Senate has NO exceptions to it, unlike Rep. Reece’s bill.

    Just an FYI (and I hate to be “that guy”), Rep. Reece is a state representative, not a congresswoman. With a Republican controlled legislature, her bill likely will not see another hearing.