New York Credit Reporting Restrictions

A new New York law, S03072, included in the New York laws at: General Business §380-a, prohibits use of credit reports in the employment process. There are only eight narrow exception categories, but initially, the immediate impact on CRAs is the requirement that before a CRA provides a credit report, the CRA must obtain a certification from the end-user that the credit report will only be used for one of the following permitted uses. The eight permitted uses are:

1. Employers required by state or federal law or by a self-regulatory organization to use an individual’s consumer credit history for employment purposes.
2. Persons applying for employment as peace officers, police officers, or positions with a law enforcement agency.
3. Persons in a position subject to a background investigation by a state agency where the person is in an appointed position bearing a high degree of public trust.
4. Persons in a position required to be bonded under state or federal law.
5. Persons in a position requiring security clearance under state or federal law.
6. Persons in a non-clerical position having regular access to trade secrets, intelligence information, or national security information.
7. Persons in a position with (a) signatory authority over third-party funds or assets valued at $10,000 or more or (b) have a fiduciary exemptions are narrowly defined and are expected to be narrowly construed by courts and state agencies.
8. Persons with regular duties that allow the employee to modify digital security systems.

This list, in this author’s opinion, is far too restrictive. For example, a credit report is not available to screen employees who will enter customers’ homes. The NBA runs credit reports on their referees to identify a person(s) with financial problems after a referee took bribes to call fouls. What the author has learned over the years is that limited allowed use of any information is often very inadequate to include all positions with which an applicant’s credit record, or other restricted information, is important, but we have to go along with the law as written.

This law goes into effect on April 18, 2026, so you have time to address this with your clients and determine how you can keep track of these clients who can or cannot order credit reports for employment in New York.