New York State Bans Consumer Credit Reports in the Hiring Process

On December 19^th, 2025, Governor Kathy Hochul signed SB S3072 into law, amending the New York State Fair Credit Reporting Act (“NYFCRA”) to prohibit the use of consumer credit reports when making hiring or compensation decisions. The amendment includes narrow exceptions to this prohibition and will take effect on April 18, 2026.

To whom does this apply?

The NYFCRA applies to consumer reporting agencies; users of consumer reports such as employers; and furnishers of information to consumer reporting agencies within New York State.

What is the law?

Under New York’s amended version of the Fair Credit Reporting Act, employers will be prohibited from requesting an applicant’s “consumer credit history” for employment purposes. The Amendment defines “consumer credit history” as “an individual’s credit worthiness, credit standing, credit capacity or payment history.” This will effectively prohibit any New York employer from using any written or other communication of any information by a consumer reporting agency or from the individuals themselves that relates to their consumer credit history. The Amendment not only restricts employers from requesting or using consumer credit history but also restricts consumer reporting agencies from providing consumer credit history unless one of the statutory exemptions applies.

The amendment provides exemptions for:

1. Employers that are required by state or federal law or by a self-regulatory organization as defined in Section 3(a)(26) of the Securities and Exchange Act of 1934, to use an individual’s consumer credit history for employment purposes
2. Persons applying for positions as, or employed as, peace officers, police officers or law enforcement
3. Persons subject to a background investigation by a state agency for a position of high public trust
4. Persons in a position in which an employee is required to be bonded under state or federal law
5. Persons in a position in which an employee is required to possess security clearance under federal law or the law of any state
6. Persons in a non-clerical position with regular access to trade secrets, intelligence information or national security information
7. Persons in a position having signatory authority over third party funds or assets valued at $10,000 or more; or that involves a fiduciary responsibility to the employer with the authority to enter into financial agreements valued at $10,000 or more on behalf of the employer
8. 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

What is the impact on employers?

While the Amendment is effective on April 18^th, 2026, employers should begin preparing for how they will comply with this new law, as well as what positions they have that will be exempted from this prohibition. For employers in New York City, this Amendment mirrors much of New York City’s current ban on consumer credit history use for employment purposes. However, New York City has additional reporting requirements that may apply. It is imperative that employers in New York City maintain compliance with local laws, while still adapting to state law changes. Since the New York City law is more restrictive, New York City employers may not see much impact from the Amendment.

Brody and Associates regularly advises management on compliance with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.