LEGISLATIVE COUNSEL'S DIGEST


AB 943, as amended, Mendoza. Employment: credit reports.
The federal Fair Credit Reporting Act (FCRA) and the state
Consumer Credit Reporting Agencies Act define and regulate consumer
credit reports and authorize the use of consumer credit reports for
employment purposes, pursuant to specified requirements. The FCRA
provides that it does not preempt state law, except as specifically
provided or to the extent that state laws are inconsistent with its
provisions.
Existing federal and state law specify the procedures that an
employer is required to follow before requesting a report and if
adverse action is taken based on the report. Under existing law, an
employer may request a credit report for employment purposes so long
as he or she provides written notice of the request to the person for
whom the report is sought. Existing law requires that the written
notice inform the person for whom the consumer credit report was
sought of the source of the report and contain space for the person
to request a copy of the report. Existing law further requires an
employer, whenever he or she bases an adverse employment decision on
information contained in a consumer credit report, to advise the
person for whom the report was sought that an adverse action was
taken based upon information contained in the report and provide the
person with the name and address of the consumer credit agency making
the report.
This bill would prohibit an employer, with the exception of
certain financial institutions, from obtaining a consumer credit
report for employment purposes unless the information is (1)
substantially job-related, meaning that the position of the person
for whom the report is sought has access to money, other assets, or
confidential information, and (2) the position of the person for
which the person is sought is a position in the state
Department of Justice, a managerial position, a position in a
city, county, or both city and county, that of a sworn peace officer
or other law enforcement position, or a position for which the
information contained in the report is required to be disclosed by
law or to be obtained by the employer.