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Bad credit? Say goodbye to your job

Defense Department fires longtime employees with credit problems.

By Teresa Mears Mar 23, 2010 1:14PM

At least 62 workers at the federal government’s military payroll facility in Cleveland are reportedly paying a high price for blemishes on their credit reports: They have been fired.


Among those losing their jobs with the Defense Finance and Accounting Service (DFAS) are Troy Marshall, union president and holder of a $47,000-a-year job in which he helps with equipment and staffing. He has worked at the facility for 17 years and told WKYC-TV that all his evaluations have rated him as "excellent" and "highly recommended." But he received a letter saying he was losing his security clearance because of credit problems. He noted that the most sensitive information the facility handles is the employees’ Social Security numbers.

Marshall has a defibrillator and diabetes. He wife has leukemia and is about to lose her job -- and therefore her health insurance -- at Kent State University. He says he owes about $6,000 in medical bills. He also ran into problems with a car loan he co-signed for his son.


"We are people. We are not just numbers. We are not just credit reports,’’ Marshall told the TV station. “Look at the whole person.”


The federal government hasn’t yet responded to WKYC’s questions about the firings.


This isn’t the first time the federal government has fired workers after credit checks. In February 2008, several longtime employees of the Defense Supply Center Columbus were fired because of their credit problems.


At the time, Dana Henry, a spokeswoman for the supply center in Ohio, said the firings were the result of an old policy that had gained greater emphasis since 9/11. "If someone's got major financial problems, that could be a threat to national security because someone could try to bribe them," Henry told the TV station. 

WTHR-TV in Indianapolis reported in 2007 about workers fired from the DFAS in Indiana over credit issues, including unpaid medical bills.


The TV station reported that the Department of Defense considers employees with delinquent debt more than 180 days old imminent threats to national security. Similar rules apply to contractors.


The federal Transportation Security Administration won't hire airport screeners or contractors who have $5,000 in overdue debt, any federal or state tax lien or any delinquent child-support payments, USA Today reported. The reason is so employees "are less susceptible to financial pressures that would make them more vulnerable to bribes," TSA spokesman Christopher White told the newspaper.


He said TSA screeners also have been fired after credit checks, but that the agency sometimes works with screeners to help solve their financial problems and keep their jobs. A 2007 report by the Homeland Security Department inspector general suggested that low pay at TSA may contribute to employees’ credit problems, USA Today reported.


As more people experience credit problems as a result of unemployment, foreclosure and other recession problems, lawmakers are questioning whether employers and prospective employers have any business looking at credit reports. Hawaii and Washington state have already said no, and at least 16 other states are considering a ban on employer access to credit reports unless the jobs are in law enforcement or involve handling lots of money. Proposed federal legislation has gone nowhere.


The DFAS workers in Ohio have enlisted the support of a senator and two members of the U.S. House.


U.S. Rep. Marcia Fudge, D-Ohio, had a conference call with the DFAS director, but her office told WKYC it was unproductive. U.S. Sen. Sherrod Brown vowed to seek a Department of Defense investigation. "I understand security clearances must not be granted or reviewed lightly, but to summarily dismiss hardworking, dedicated employees needlessly and inappropriately pushes more families into the ranks of the unemployed,’’ he told the TV station.


U.S. Rep. Dennis Kucinich, D-Ohio, also expressed outrage. He vowed: "If DFAS persists in this, I'm going to subpoena credit records of DFAS brass to see if they meet their own standard."


What do you think? Should prospective employers be able to check your credit report? Should people who run into credit problems lose their jobs? What if they're employed by the military, law enforcement or in the financial industry?


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