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Policy Update: What New York State’s Ban on Credit Checks in Employment Decisions Means for You

As of April 18, 2026, updates to New York State Fair Credit Reporting Act went into effect, making it unlawful to request or use the consumer credit history of an applicant or employee for employment purposes. As your ally behind the screens, we’re committed to providing you the important legislative updates that will impact your background screening processes to make sure you can stay compliant and hire faster, safer, and with total peace of mind. Here’s what you need to know:

New York State Fair Credit Reporting Act updates:

This change was signed into law by Governor Kathy Hochul in December 2025 and went into effect on April 18, 2026. The NYSFCRA bans credit checks for hiring, promotion, compensation, discipline, or termination decisions. Improper use of a credit report will now be considered an unlawful discriminatory practice.

“Consumer credit history” is broadly defined to include credit reports, credit scores, payment history, bankruptcies, liens, collections, and financial information obtained directly from the individual, not just traditional credit bureau reports. The law, however, does not preempt any local laws which are more protective of applicants and employees. Multijurisdictional employers must navigate both state and local requirements and follow the stricter standard where there is overlap.

Exemptions & exceptions:

There are some narrow exceptions for instances in which an employer may request or use consumer credit history in hiring decisions. These exceptions include:

  • An employer, or agent thereof, that is required by state or federal law or by a self-regulatory organization to use an individual’s consumer credit history for employment purposes.
  • Persons applying for positions as or employed as peace officers or police officers, or in a position with a law enforcement or investigative function in a law enforcement agency.
  • Persons in a position that is subject to background investigation by a state agency; provided, however, that the appointing agency may not use consumer credit history information for employment purposes unless the position is an appointed position with a high degree of public trust.
  • Persons in a position in which an employee is required to be bonded under state or federal law.
  • Persons in a position in which an employee is required to possess security clearance under federal law or the law of any state.
  • Persons in a non-clerical position having regular access to trade secrets, intelligence information or national security information.
  • Persons in a position: (A) having signatory authority over third-party funds or assets valued at $10,000 or more; or (B) that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.
  • Persons in a position 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.

With this new ban in place New York joins 10 other states that have also enacted legislation concerning the use of consumer credit history in employment decisions, including California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. Along with those states' additional laws have been enacted in several major cities, including New York City, Chicago, Philadelphia, and Washington D.C.

How to navigate these changes:

Powered by Greater Rochester’s primary business advocacy team at Greater Rochester Chamber, Authentica is here to help you navigate how hiring and public policy overlaps in cases like this. If you have questions about your current screening process or this law change impacts it, our team is available to:

  • Review your current screening program to ensure compliance
  • Identify whether any statutory exceptions may apply to your organization
  • Assist with updating processes to ensure you’re still hiring with confidence

To learn more about Authentica or to schedule a compliance review please contact Dominic Oliveri at Dominic.Oliver@Authentica.us to get started.