Key Points

• Statewide ban on most employment credit checks: New York State’s amendment to the Fair Credit Reporting Act prohibits employers from requesting or using consumer credit history for hiring, promotion, compensation or other employment decisions, effective April 18, 2026, aligning statewide restrictions with New York City’s Stop Credit Discrimination in Employment Act.
• Narrow exemptions for sensitive roles: Exemptions largely mirror NYC’s and cover positions legally required to use credit history; peace/police and investigative law enforcement roles; high public trust appointments; bonded roles; roles where the law requires security clearances; nonclerical roles with regular access to trade secrets or national security information; positions with signatory or fiduciary authority over $10,000; and roles with authority to modify digital security systems.
• Employer compliance and notice requirements: Employers should audit job descriptions, document and justify any exemption, maintain an “exemption log,” and update background check policies and training; if an exemption applies, provide written notice that a consumer report may be requested, disclose upon request whether it was sought, and identify the consumer reporting agency.

New York State recently amended its Fair Credit Reporting Act to further restrict the use of consumer credit history in employment decisions. These amendments take effect on April 18, 2026. On this date, employers will no longer be permitted to request or use an applicant or employee’s credit history in making employment decisions except in very limited circumstances. New York City has had identical restrictions since 2015, when it enacted the Stop Credit Discrimination in Employment Act. Now these restrictions will apply statewide.

Consumer Credit History Defined

“Consumer credit history” is broadly defined, and mirrors the city’s 2015 definition, to include an individual’s credit worthiness, credit standing, credit capacity or payment history, as reflected by a consumer credit report, credit score, information directly obtained from the individual regarding credit accounts, bankruptcies, judgments or liens, and also includes “any written or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history.”

The Statewide Prohibition and Exemptions

Employers will no longer be able to use an employee’s or an employment applicant’s consumer credit history in any employment decisions, including but not limited to hiring, promotion or compensation decisions.

The amendments recognize that some positions by their nature or job duties or both require exemptions from these restrictions. These exemptions are narrow and largely mirror the city’s exemptions. Under the law, the following positions are exempted from the statewide prohibition:

• Positions for an employer or agent that is required by applicable law or a self-regulatory organization to use an individual’s consumer credit history for employment purposes.
• Peace or police officers, and investigative positions within law enforcement agencies.
• An appointed position with a high degree of public trust that is subject to background investigation by a state agency.
• Positions that require an employee to be bonded under federal or state law.
• Positions where federal or state law requires the employee to possess security clearances.
• Non-clerical positions with regular access to trade secrets, intelligence information or national security information.
• Positions with (a) signatory authority over third-party funds or assets valued at $10,000 or more or (b) a fiduciary duty or authority to enter into financial transactions valued at $10,000 or more on behalf of the employer.
• Positions with regular duties that allow the employee to modify digital security systems.

If one of the above exemptions does apply, the employer must first provide the applicant or employee with a notice in writing that: (i) a consumer report may be requested, (ii) the individual upon request will be informed whether or not a consumer report was requested, and (iii) if such report was requested, the name and address of the agency that furnished the report.

Employer Compliance

New York State employers should review job descriptions and identify which positions may qualify for one of the state’s exemptions. If it is unclear whether an exemption applies, we recommend contacting legal counsel to assist in making the appropriate determination. If an exemption applies, employers should document it. While the state does not yet have guidance of its own, New York City generally requires employers to maintain an “exemption log” to provide to the New York City Commission of Human Rights upon request. Because these amendments mirror the city’s pre-existing law, it is likely that New York State will adopt the same guidance.

Employers who conduct consumer credit background checks and do not fall into one of the above exemptions should update their policies and procedures to ensure compliance and to train personnel in charge of employment decisions to understand this prohibition.

For information on Fair Credit Reporting Act compliance and related issues, contact the authors Carolyn D. Richmond at 212.878.7983 or crichmond@foxrothschild.com, Glenn Grindlinger at 212.905.2305 or ggrindlinger@foxrothschild.com, or Ryan W. Lee at 212.878.7950 or rwlee@foxrothschild.com or another member of the firm's Labor & Employment Department.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the authors and not necessarily this law firm or its clients.