Checking Credit

I oppose this.

Sixty percent of employers recently surveyed by the Society for Human Resources Management said they run credit checks on at least some job applicants, compared with 42 percent in a somewhat similar survey in 2006.

Employers say such checks give them valuable information about an applicant’s honesty and sense of responsibility. But lawmakers in at least 16 states from South Carolina to Oregon have proposed outlawing most credit checks, saying the practice traps people in debt because their past financial problems prevent them from finding work.

Wisconsin state Rep. Kim Hixson drafted a bill in his state shortly after hearing from Terry Becker, an auto mechanic who struggled to find work.

Becker said it all started with medical bills that piled up when his now 10-year-old son began having seizures as a toddler. In the first year alone, Becker ran up $25,000 in medical debt.

Over 4 1/2 months, he was turned down for at least eight positions for which he had authorized the employer to conduct a credit check, Becker said. He said one potential employer told him, “If your credit is bad, then you’ll steal from me.”

“I was in a deep depression. I had lost a business, I was behind on my bills and I was unable to get a job,” he said.

Hixson calls what happened to Becker discrimination based on credit history and said his bill would ban it.

“If somebody is trying to get a job as a truck driver or a trainer in a gym, what does your credit history have to do with your ability to do that job?” Hixson said. He said he knows of no research that shows a person with a bad credit history is going to perform poorly.

A credit check can be a useful tool ans smart employers use it as one tool in the arsenal.  A bad hire is incredibly expensive and disruptive for a company.  As such, any hire is a risk.  A credit check just gives a little more insight into that person so that the employer can make an informed decision.  I think at my last 4 jobs, I had a credit check, background check, and had to take a personality test of some sort.  All of those things allowed the companies to get to know me a little better to see if I’d be a fit. 

For some jobs, a credit check reveals little.  But for some it is vital.  In either case, this is yet another case where government should butt out and let companies run their business.  Given how risky hiring can be, why would government want to potentially increase the risk and thus discourage hiring?

Payday Lenders Pumped Money into Campaign Committee

Of course they did. 

Payday lenders pumped $10,500 into a campaign committee controlled by Assembly Speaker Mike Sheridan (D-Janesville) just before and after he announced he no longer supported clamping a 36% annual interest rate cap on the industry, a report released Monday shows.

A payday loan executive and industry lobbyist gave the Assembly Democratic Campaign Committee a combined $5,500 on Sept. 9. A day later, Sheridan said for the first time publicly he opposed the rate cap, even though he co-sponsored a bill to do that in the last legislative session.

Three weeks later, the Democratic committee received a total of $5,000 from two Check ‘n Go executives, the report by the Wisconsin Democracy Campaign says. The group monitors campaign spending and lobbies for limiting contributions.

“It’s hard not to notice” the timing of the donations, said Mike McCabe, the Democracy Campaign’s executive director. “It’s just something that jumped out of us.”

Sheridan, 51, disclosed in late January he had dated Shanna Wycoff, 31, a lobbyist for Axcess Financial, which operates Check ‘n Go. The two are no longer seeing each other, Sheridan said earlier this month.

Sheridan, who is in the process of getting a divorce, has insisted his relationship with Wycoff played no role in his change of views on regulating the industry. He has said he privately told some Assembly Democrats as early as 2008 he no longer supported a 36% rate cap.

The Hook

And we’re the fish.

By the time the next governor takes office in January, the state will have spent nearly $57 million in federal funds for the Milwaukee-to-Madison route, according to the state’s application for the federal dollars. If a future governor halts the project, the federal government would not reimburse the state for any money spent, and the state would have to repay any money it had already received, Klein said.

Neumann and Walker say, however, that they would weigh the money already spent against what taxpayers would have to spend in the future. The federal application estimates state support for operating the Milwaukee-to-Madison line at $7.5 million in 2013, plus $8.1 million for the Milwaukee-to-Chicago leg, with the combined annual total growing from $15.6 million to $28 million by 2022.

“If I get to be governor, and we find this thing is going to be an economic boondoggle for the people of this state, we will shut it down,” Neumann said.

As a home builder, Neumann said, he has ended construction projects when “it was still much better to walk away than to have a continuing drain on our resources.”

Walker said his analysis would include not only the question of whether the operating costs would use tax dollars, but also whether they would take money away from highways and bus systems. He also voiced concern about construction cost overruns, even though the $810 million budget includes more than $158 million for inflation and contingencies. The answers to those questions will determine whether the project proceeds, Walker said.

Do you see the hook?  It’s the ol’ “we’ve already spent $57 million and you wouldn’t want to waste that by not building a train, would you!?!?”

I would hope that a new governor wouldn’t feel obligated to waste more money just because his predecessor did.