In a restricted vote Thursday night, the Louisville Metro Council overturned a proposal to prohibit employers from considering credit scores or credit history in deciding who to hire.
The seven Republicans in the body were united in opposing the measure, with Democrats Brent Ackerson, Mark Fox, Pat Mulvihill, Cindi Fowler and Madonna Flood joining them. The proposed ordinance, sponsored by District 7 Metropolitan Council member Paula McCraney, would have codified the use of a job seeker’s credit history in the hiring process as a discriminatory practice. It disproportionately affects people of color and women.
Like other local anti-discrimination laws, Metro’s Human Relations Commission would have been tasked with enforcing the new rule.
At a recent committee meeting, McCraney said his motivation for creating the ordinance was, in part, personal. She said she grew up poor and had bad credit as a young woman in Tulsa. She eventually became vice president of a bank.
“People have bad credit, but that doesn’t indicate how important it is to the job,” McCraney said. “If a poor black girl like me can grab the opportunity today, as I’m sitting here… then everyone deserves an opportunity.”
The proposal ultimately fell through with a 12-10 vote. District 17 council member Markus Winkler, a Democrat, abstained because he said the ordinance would impact his work as a recruiter.
Almost a third of employers perform credit or financial checks on certain applicants, according to a 2018 survey. The reasoning is typically this: If someone applies for a loan and then misses a payment or doesn’t pay it back, it does. perhaps said about its reliability or how it would discharge other responsibilities.
In an interview with WFPL News ahead of the vote, McCraney said she believed this type of reasoning was wrong, especially at a time when many families are being financially affected by the pandemic, through no fault of their own.
“There are many reasons that people can have bad credit, and God forbid, they should now be trying to find a job to improve their family, pay their bills and not be able to get one because of their bad credit. credit report, ”she said. noted. “It’s like a perpetual problem that they will always have.”
Supporters of the ordinance pointed to recent studies that found that the practice of using credit history in this way puts some people of color and women at a disadvantage.
A 2007 report from the National Consumer Law Center and the Center for Economic Justice found that blacks and Latin Americans were overrepresented among consumers with poor or no credit. The National Partnership for Women and Families also found that data from the 2010 U.S. Census showed that households headed by single women were 75% more likely to have zero or negative net worth.
The draft order rejected Thursday evening provided exemptions for people applying for jobs in the police or a profession that would require regular access to large sums of money.
Anthony Piagentini, a member of the District 19 city council, which heads the Republican caucus, argued that if credit checks were truly discriminatory, there should have been no exemptions from the ban. He voted against the measure.
“A credit score tells you if someone borrowed money, made a promise to pay that money, and broke that promise,” he said. “This is not a judgment on their race, it is a judgment on many other factors and their ability to make decisions.”
District 13 council member Mark Fox, Democrat and former Louisville police officer, said he agreed with Piagentini that credit scores were useful information for employers. He drew on his own experience in conducting background investigations.
“A credit check gives you the opportunity to look into that person’s window into the world and how they’ve kept their word,” Fox said. “If there are things that are beyond someone’s control, like your ex-spouse who racked up credit cards by buying a boat right before your divorce, that’s something everyone can relate to. “
Fox, Piagentini and other members opposed to the proposal said they believed small businesses would have been negatively affected. Unlike large employers, they said small business owners could lose all of their livelihood if an employee made a mistake with even a few thousand dollars.