New York State Will Restrict Employers’ Use of Consumer Credit Information, Starting April 2026

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Patricia Tsipras

April 2, 2026

In a significant development for employers and employees alike, New York State has enacted amendments to its Fair Credit Reporting Act (NY FCRA), which will take effect on April 18, 2026.  These amendments, signed into law by Governor Kathy Hochul on December 19, 2025, impose strict limitations on the use of consumer credit history in employment decisions.  With these changes, New York becomes the 11th state to implement such restrictions, further aligning with a growing national trend toward protecting job applicants and employees from credit history discrimination.

Key Provisions of the Amendments
The amendments to the NY FCRA make it unlawful for employers to request or use an individual’s consumer credit history in hiring, compensation, or other terms and conditions of employment.  “Consumer credit history” is broadly defined to include an individual’s creditworthiness, credit standing, credit capacity, or payment history.  This prohibition applies to both job applicants and current employees, significantly narrowing the circumstances under which credit information can be considered in employment decisions.

Limited Exceptions
While the amendments impose a general ban, they provide specific exceptions for certain roles and industries.  Employers may still request or use consumer credit history if the position or employer falls into one of the following categories:

• Law Enforcement and High-Trust Roles: positions involving law enforcement or those requiring a high level of public trust
• Security Clearances: roles requiring federal or state security clearances
• Access to Trade Secrets or Intelligence: positions involving access to sensitive trade secrets or intelligence
• Regulatory Requirements: employers subject to state or federal laws or self-regulatory organization rules mandating the use of credit history

Implications for Employers
Employers across New York State, including those in New York City, must carefully review and update their hiring and employment practices to ensure compliance with the new law. Notably, New York City already has its own Stop Credit Discrimination in Employment Act (SCDEA), which prohibits the use of credit history in employment decisions, with similar exceptions.  The state law does not preempt the SCDEA, meaning employers in New York City must comply with both sets of regulations.

Enforcement and Penalties
The amendments provide a private right of action for aggrieved individuals, allowing them to seek actual damages and reasonable attorney’s fees.  The availability of this relief creates a significant incentive for compliance, as violations could lead to costly litigation.

Preparing for Compliance
To prepare for the April 2026 effective date, employers should take the following steps:

• Policy Updates: Revise hiring policies, authorization forms, and adverse action templates to remove any references to consumer credit history, except where permitted by law.
• Training: Educate Human Resources personnel and hiring managers on the new requirements and exceptions.
• Legal Review: Consult with legal counsel to ensure compliance with both state and local laws, particularly for employers operating in New York City.

The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania.  This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, New York, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist.  Always consult an attorney with specific legal issues.