New York has now enacted a statewide ban that, with limited exceptions, prohibits employers from using consumer credit history in hiring and other employment decisions. Effective April 18, 2026, the law amends the state’s General Business Law to make it an unlawful discriminatory practice for most employers to request or rely on an applicant’s or employee’s credit information when making employment decisions.
What the Law Prohibits
The statute broadly defines “consumer credit history” to include an individual’s creditworthiness, credit standing, credit capacity, or payment history. It covers traditional consumer reports and credit scores, as well as information obtained directly from the individual, such as the number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limits, prior credit inquiries, bankruptcies, judgments, or liens.
With that definition in place, the law makes it unlawful for an employer, labor organization, employment agency, or their agents to request or use consumer credit history for employment purposes or to discriminate based on that history in hiring, compensation, or any term, condition, or privilege of employment. The restriction applies both at the application stage and for current employees. In practice, simply asking an applicant about prior bankruptcies or collections and using that information in a decision can trigger the law.
Limited Exceptions
The law includes narrow exceptions. Employers may use consumer credit history where state or federal law, or a self-regulatory organization in the securities industry, requires it. Credit checks are also allowed for peace officers and police officers, positions with a law enforcement or investigative function in a law enforcement agency, and certain appointed positions subject to state background investigation that involve a high degree of public trust, to be further defined by regulation.
Additional exceptions cover roles where an employee must be bonded under law, positions that require a federal or state security clearance, certain non-clerical roles with regular access to trade secrets, intelligence information, or national security information, and positions with significant financial authority, such as signatory authority over third-party funds or assets of at least $10,000 or authority to enter financial agreements of at least $10,000 on the employer’s behalf. Finally, the law permits credit checks for positions whose regular duties include modifying digital security systems that protect the employer’s or clients’ networks or databases. Employers relying on these exceptions should be prepared to demonstrate how a particular position fits the statutory criteria.
Impact on Licensing Agencies and Background Screeners
The statute also restricts the use of consumer credit history by state and municipal agencies in licensing and permitting.
As a general rule, those agencies may not request or use credit history for licensing or permitting purposes, except where required by state or federal law or when considering nonpayment of taxes, fines, penalties, or fees that have been admitted, reduced to judgment, or are subject to a lien, levy, or warrant. Agencies may still obtain and use credit information pursuant to a lawful subpoena, court order, or specific law enforcement investigation.
Consumer reporting agencies and background screening providers are likewise affected. The law limits when they may furnish credit information for employment purposes, effectively requiring them to exclude creditworthiness, standing, capacity, and history from New York employment reports unless an exception applies.
Interaction with Local Laws and Employer Next Steps
The statute does not preempt local laws that are more protective of applicants and employees. Existing local ordinances, such as New York City’s restrictions on employment-related credit checks, remain in effect to the extent they afford greater protection. Employers must therefore navigate both state and local requirements and follow the stricter standard where there is overlap.
Given these requirements, companies should review their existing filtering policies and compliance management systems to account for the new legal requirements.