Question & Answer

Question: In wrapping up my 1998 goals, I noticed that the human resources department has not circulated the blanket request for permission to obtain an employee's credit report. HR is still resisting, saying that it would unduly upset bank staff and they don't think it is necessary.

Answer: Under the revised Fair Credit Reporting Act, you need to have the employee's permission before you obtain their credit report. Whether such a request upsets employees probably depends on how it is presented rather than what it actually is. Most bank employees understand that they are held to a high standard of ethics and performance. That the bank may want to obtaining their credit report should be no surprise to them. But it should also be presented as a routine procedure rather than under the umbrella of "we'd like to be able to investigate you in case we think you committed a crime."

The possibility of employee crime, however, is precisely why your HR people should have those blanket permissions on file. When the bank does suspect or identify a crime, it needs to be able to move with speed. This is not the time to ask the employee's permission. Remind the HR staff that they will be the ones - not you - facing an angry CEO and explaining that they didn't obtain advance permission because they thought it might upset somebody.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 17, 12/98