California employers can continue checking job applicants' credit histories.
Gov. Arnold Schwarzenegger vetoed a bill this week by Assemblyman Tony Mendoza, D-Norwalk, that would have barred employers from reviewing most prospective hires' credit statements.
"The governor sided with big business to continue the practice of legalized discrimination in California," Mendoza said. "Searching for work in today's poor economic climate just became tougher as millions struggling to make their payments will continue to have their credit report used against them in the hiring process."
Legal in California when applicants grant consent, credit inquiries are an increasingly common component of pre-employment background checks. About 43 percent of employers nationwide screen applicants' credit histories, according to a federal estimate.
Assembly Bill 943 would have limited the credit reviews to law enforcement and managerial slots, as well as positions that handle sensitive financial information or large amounts of cash, jewelry or valuables.
The bill easily cleared both chambers of the Democratic-controlled Legislature.
But Republicans and the business lobby strongly opposed the legislation, arguing that credit checks can weed out financially irresponsible employees and help uncover liens, bankruptcies and other red flags.
The Long Beach and California chambers of commerce, issued statements of opposition. The Long Beach chamber also wrote a letter to the Republican governor, urging a veto.
"Gov. Schwarzenegger understands that California business cannot withstand additional regulation at a time when we are struggling with economic recovery," Allan Zaremberg, president of the California Chamber of Commerce, said in a news release after the veto.
Mendoza had argued that he saw no correlation between a person's borrowing and employment histories, particularly in a climate of foreclosures, layoffs, divorces, high student loan debt and identity theft.
