March 31, 2026
New York State-Wide Ban on Using Credit History in Employment Decisions
By Leona Hansen
Beginning April 18, 2026, employers throughout New York State will be prohibited from requesting or using an applicant’s or current employee’s consumer credit history when making employment decisions.
The new restriction stems from amendments, signed by Governor Kathy Hochul in December 2025, to the New York State Fair Credit Reporting Act (NYSFCRA). Originally enacted in 1978, the NYSFCRA regulates the collection, use, and dissemination of consumer credit information in New York.
The recent amendments expand the NYSFCRA’s reach by restricting the use of consumer credit history in employment decisions. Under the revised law, employers will be prohibited from requesting or obtaining an applicant’s or employee’s consumer credit history for employment purposes, and may not use such information when making decisions regarding hiring, compensation, or any other terms or conditions of employment. “Consumer credit history” is defined broadly to include an individual’s credit worthiness, credit standing, credit capacity, or payment history, as reflected in consumer credit reports, credit scores, as well as information obtained directly from the individual about credit accounts or bankruptcies, judgments, or liens. The amendments also place restrictions on consumer reporting agencies, which may not provide credit history information for employment purposes unless a statutory exception applies—meaning they cannot furnish such information where employers are prohibited from using it.
The law contains only limited exceptions, including where the use of credit history is required by federal or state law, by a self-regulatory organization, or in response to a lawful subpoena or law enforcement investigation. Certain defined roles are also exempt, such as police officers, roles requiring a security clearance, roles involving specific fiduciary duties to employers, and roles involving regular access to or modification of digital security systems.
With this change, New York joins a growing number of jurisdictions that limit the use of credit history in employment decisions, including New York City through its Stop Credit Discrimination in Employment Act. Employers in New York City must comply with both the state and city laws and, where there may be inconsistencies between them, follow the law that provides more protection to applicants and employees.
Employers should review their hiring and background check practices now to ensure compliance before the April 2026 effective date. If you have questions or would like to discuss these changes further, please contact Chaim Book at cbook@booklawllp.com, Sheryl Galler at sgaller@booklawllp.com, Rebecca Nathanson at rnathanson@booklawllp.com, or Leona Hansen at lhansen@booklawllp.com.
