Summary
- Development: As of April 18, 2026, New York’s amend Fair Credit Reporting Act broadly prohibits using consumer credit history for employment decisions.
- Why it matters: The change restricts a common hiring tool and requires employers to reassess background-check practices, documentation, and notices.
- Next steps: Employers should confirm any potential exemptions, adopt or update their written policies, obtain required notices/consent, and retain compliance records.
Recent Regulatory Changes
As of April 18, 2026, employers, labor organizations, and employment agencies in the state of New York are prohibited from requesting or using an applicant’s or current employee’s consumer credit history in making employment decisions. They are also prohibited from using that credit history in discriminating against an applicant or employee in any way related to their employment.
In December 2025, the New York State Fair Credit Reporting Act (“NYSFCRA”) was amended to restrict the use of consumer credit history for employment purposes. New York now joins at least 12 other states and several major cities, including Chicago, Philadelphia and New York City through its Stop Credit Discrimination in Employment Act, which have comparable laws.
Under the Amendment, “Consumer credit history” is defined broadly as “an individuals’ credit worthiness, credit standing, credit capacity or payment history as indicated by (1) a consumer credit report, (2) credit score, or (3) information an employer obtains directly from the individual regarding i) details about credit accounts, including the individuals number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit or prior credit report inquiries or (ii) bankruptcy judgments or liens.” The Amendment further prohibits consumer reporting agencies from providing credit history information for employment purposes absent a statutory exemption.
Limited Exceptions
The Amendment provides for limited exemptions for certain employers and positions, including employers that are required by state or federal law, or a self-regulatory organization, to use an individual’s consumer credit history for employment purposes or in response to a lawful subpoena or law enforcement investigation. Certain defined positions are also exempt, including:
- Police officers or positions with law enforcement or in an investigative function with a law enforcement agency;
- Persons in a position with a high degree of public trust subject to background investigation by a state agency;
- Persons in a position that requires security clearance under state or federal law;
- Persons in a position that requires the employee to be bonded under state or federal law;
- Persons in non-clerical positions that have regular access to trade secrets, intelligence information or national security information;
- Persons in positions that have signatory authority over third party funds or assets valued at $10,000 or more, or that involve a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer; and
- Persons in positions with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.
These exemptions, however, are narrow and most only apply to specific roles, not to the employer or industry as a whole.
Next Steps for Employers
As New York commences its enforcement efforts, it is important for employers to review their hiring and employment policies and practices. Specifically, employers should:
- Evaluate whether a valid exception applies before requesting a credit check on current or potential employees;
- Prepare written policies outlining when and why credit information can be requested or used in employment decisions; and
- Keep thorough records of its compliance efforts and relevance of any credit checks conducted.
Employers also need to comply with notice requirements when they determine a credit check is necessary. Obtaining informed consent, notifying individuals of their rights under the NYSFCRA amendments, sharing copies of reports received with the individual, and providing clear adverse notices if that credit check indeed affects a hiring decision are all key practices to ensure compliance.
Leech Tishman regularly advises employers on hiring practices, employment agreements, and compliance with evolving workplace laws. We are prepared to assist clients in assessing the implications of NYSFCRA, reviewing existing policies and procedures, and implementing appropriate compliance measures. For assistance or additional information, please contact Lisa Alexis Jones at ljones@leechtishman.com, or Lydia A. Pappas at lpappas@leechtishman.com, attorneys in Leech Tishman’s Labor & Employment Practice Group.