New York Just Banned Credit Checks in Hiring: What Employers Need to Know

Hiring for corporate or financial roles in New York?As of April 18, 2026, a new state law prohibits most New York employers from requesting or using a job applicant’s (or current employee’s) credit history in employment decisions.

Here’s everything you need to know — and how to make sure your background screening process stays compliant.

What the Law Actually Says

Governor Kathy Hochul signed Senate Bill S03072 into law on December 19, 2025, amending the New York State Fair Credit Reporting Act. Effective April 18, 2026, the law makes it an unlawful discriminatory practice for any employer, labor organization, or employment agency to request, obtain, or use a job applicant’s or employee’s consumer credit history in hiring, compensation, promotions, transfers, or any other employment-related decision.

“Consumer credit history” is broadly defined under the new law. It covers:

• Consumer credit reports and credit scores
• Bankruptcies, judgments, and liens
• Details about credit accounts, late or missed payments, charged-off debts, items in collections, and prior credit inquiries
• Any information obtained directly from the applicant about their financial history

In other words, you can’t ask about it, pull a report on it, or factor it in — regardless of how you obtained the information.

Critically, the law also places obligations on background screening companies. According to Seyfarth Shaw’s legal analysis, the amendments prohibit consumer reporting agencies from providing employment-purpose reports that contain credit history information unless the employer or position qualifies for an exemption. At SureCheck, we’ve already updated our processes to reflect this requirement.

Why This Matters: New York Joins a Growing National Trend

New York is now the eleventh state to restrict employer use of credit history, joining California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. Similar restrictions are also in place in New York City, Washington D.C., Chicago, Cook County, Madison, and Philadelphia.

New York City actually already had a ban in place since 2015 under the Stop Credit Discrimination in Employment Act (SCDEA). This new statewide law extends those protections to all of New York.

The momentum is clear: employers across the country are increasingly being asked to demonstrate that their screening practices are relevant, job-related, and free of unintended bias. Credit history, critics have long argued, disproportionately impacts job seekers who have experienced medical emergencies, job loss, or other financial hardships outside their control.

The Narrow Exemptions (And What They Actually Mean)

The law is broad, but it’s not absolute. There are specific categories of positions that remain exempt from the credit check ban:

• Law enforcement and investigative roles — police officers and positions with investigative functions in a law enforcement agency
• Bonded positions — roles where the employee is required to be bonded under state or federal law
• Security clearance roles — positions requiring federal or state security clearance
• Fiduciary roles involving significant funds — non-clerical positions with signatory authority over third-party funds or assets valued at $10,000 or more
• Access to trade secrets or national security information — non-clerical roles with regular access to sensitive intelligence
• Digital security system roles — positions with regular duties to modify digital security systems protecting employer or client networks
• Appointed positions with high public trust — subject to background investigation by a state agency

One important note for NYC employers: the city’s exemptions are actually narrower than the state’s in some areas. The financial and digital security exemptions under NYC law apply only to executive-level positions, while the state law covers any position with those duties. NYC employers must continue to apply whichever standard offers the greater protection to employees.

What Employers Must Do Right Now

If you’re using credit checks as part of your standard hiring process in New York, here’s your action plan:

1. Audit your current screening process. Review all job applications, intake forms, and interview guides. Remove any questions — direct or indirect — about credit history, bankruptcies, or personal financial status.
2. Identify exempt roles and document your rationale. If you have positions that genuinely fall under one of the exemptions, document why. The New York Division of Human Rights can request information about your use of any exemption, so recordkeeping matters.
3. Update your background screening vendor. Make sure your background check provider is not including credit history in reports for non-exempt New York positions. This is no longer just a best practice — it’s the law.
4. Train your HR and hiring teams. Everyone involved in recruitment and employment decisions should understand what constitutes a violation and how to evaluate candidates without referencing financial history.
5. Review your policies and employee handbook. Written policies should explicitly state that credit history will not be considered except where legally permitted.

How SureCheck Handles This for You

At SureCheck Background Screening, compliance isn’t an afterthought — it’s built into how we operate. We stay current with state and local employment laws so that your screening process doesn’t create legal exposure.

For our clients with New York-based hiring, we’ve already structured our reporting to ensure credit history is excluded from employment-purpose reports for non-exempt positions. Our team monitors regulatory guidance as it is issued so your background checks remain compliant as enforcement details develop.

Whether you’re running background checks for a multi-location franchise group, a staffing agency, or a single New York location, we can build a compliant, efficient screening program around your specific roles and risk profile.

Curious whether your current process is compliant? Contact SureCheck for a quick review.

New York’s new credit check ban is one of the most significant employment screening compliance changes in recent years — and it went live this month. Employers who continue using credit history in most hiring decisions face discrimination claims, administrative penalties, and reputational risk.

The good news? Compliance is straightforward with the right screening partner and updated processes. Credit history was always a questionable proxy for job performance anyway. The law simply makes that official.

Sources & Further Reading

• Seyfarth Shaw: New York State Bans the Use of Credit Checks in the Employment Context
• Littler: New York Is the Eleventh State to Restrict Employers’ Use of Credit History
• Davis Wright Tremaine: New York State Bans Use of Credit Reports in Most Employment Decisions
• Mayer Brown: New York Bars Employers From Considering Consumer Credit History
• Rimon Law: New York Credit Check Ban: What Employers Need to Know

SureCheck Background Screening is a woman-owned background screening company based in Golden, CO, serving employers nationwide. We specialize in compliant, fast, and flexible pre-employment screening solutions. Learn more at surecheckbackground.com.