Senate Bill 13-18 (Senator Ulibarri, Representative Fischer)

By Cathy Wanstrath,Lobbyist, Land Title Association of Colorado


Senate Bill 13-18 goes into effect July 1st be sure to read if you currently use credit checks in the hiring process!!!

Kathy Wanstrath, LTAC LobbyistS.B. 18 passed the Legislature this spring, and was signed into law by Governor Hickenlooper on April 19, 2013.  It becomes effective July 1, 2013.  The title of the bill is “Concerning the Use of Consumer Credit Information by Employers”, but its proponents  euphemistically call it the “Employment Opportunity Act”.  It could also be called the “limiting the employer’s ability to make a fully-informed hiring decision” act. 
For employers currently using consumer credit reports as a routine part of the hiring process, STOP until you read the conditions set out by S.B. 18.
The proponents of S.B. 18 believe that good applicants and good employees are being denied opportunities to be hired or promoted because of poor credit scores.  They pointed out an apparent lack of research to support the use of such reports to identify persons with good job potential.  There is truth to the claim that credit reports are often inaccurate, mixing up names or failing to correct mistakes that have been reported.
However, many employers whose employees handle large amounts of customer funds, and sensitive customer information, have relied on information from credit reports when the applicant pool has been narrowed to potential hires.  Relevant information might be judgments or liens against the person, child support payments in arrears, or excessive unpaid consumer debt.  The assumption is that, all else being equal, these personal credit problems may indicate potential problems in managing workplace duties.
The law will still allow use of consumer credit reports when “the employer is a bank or financial institution” (that term is not defined in the bill).  Consumer credit information may also be used if “the report is substantially related to the employee’s current or potential job and the employer has a bona fide purpose for requesting or using information in the credit report that is substantially related to the employee’s current or potential job and is disclosed in writing to the employee”.  HOWEVER, the definition earlier in the bill of “substantially related to the …job” is the crux of the limitation that will exist after July 1.
“Substantially related to the employee’s current or potential job” means the position “constitutes executive or management personnel or officers or employees who constitute professional staff to executive and management personnel…”   The position must also meet at least one further standard, including “a fiduciary responsibility to the employer”;… OR “access to customers, employees’, or the employer’s personal or financial information other than information customarily provided in a retail transaction…” OR “the authority to issue payments, collect debts, or enter into contracts”…
The limitations read together will prohibit use of credit reports for non-management or non-executive staff, unless they are “professional staff to executive and management personnel.” 

All LTAC members involved in the hiring process are encouraged to read the full version of the new law in the lobbyist report on the LTAC website.  For a copy of the full bill please go to our advocacy section of the website and click on the legislative report.
Join the Title Action Network - TAN
Simplifile SoftPro - Site link Property Insight Red Vision