The bill that would exempt banks and financial institutions from restrictions on use of credit information in employment decisions passed its last hurdle in the Colorado Legislature last week and will be sent to Gov. Hickenlooper who has 30 days to sign the bill. The bill will go into effect when signed or at the end of the 30-day period, whichever occurs sooner, unless the governor vetoes it. A veto is not expected.
Colorado’s Employment Opportunity Act passed in the 2013 legislative session and became effective July 1, 2013. This law prohibits employers with four or more employees, excluding law enforcement and domestic and farm labor, from using credit information for employment decisions unless credit is “substantially related” to the job. For credit to be “substantially related,” the position must constitute executive or management personnel, an officer, or professional staff to executive or management personnel and the position must perform certain high-level duties. Effectively, this law prohibits credit screening of applicants and employees for front-line positions.
Banks and financial institutions, who have long conducted credit screening of tellers and other front-line positions, thought they were exempt from this law. However, the interpretation of the current language by the Colorado Attorney General’s Office and the Division of Labor and Employment is that they are not exempt.
Senate Bill 14-102 was proposed in this legislative session to remedy that situation. We will update you when the bill is signed.