2017-08

Promoting Job Security Under the Consumer Credit Protection Act

REPRESENTATIVE DAN PABON, CHAIR (CO) BANKING, HOUSING & CREDIT TASK FORCE

WHEREAS, the National Hispanic Caucus of State Legislators (NHCSL) has been committed to the financial empowerment of the Hispanic community through improved access to capital as well as a marketplace that offers safe and affordable lending products and services;

WHEREAS, the National Hispanic Caucus of State Legislators (NHCSL) is committed to ensuring employment opportunities for the Hispanic community;

WHEREAS, the Consumer Credit Protection Act guarantees that an employer does not discharge employees for wage garnishment only for the first wage garnishment, but not for the second or any subsequent debts;

WHEREAS, the Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act;

WHEREAS, policies and regulation should prevent predatory lending practices to reduce garnishment cases rather than restricting employment opportunities;

WHEREAS, the discharge of the employee does not guarantee an income and jeopardizes the ability of an employee to be able to pay off a debt;

WHEREAS, state intervention should be guided on protecting the employee on cases where garnishment will not involve discharge, even after the second or subsequent debts;

WHEREAS, 33 states cap the amount to be garnished at 25% of the disposable income ;

WHEREAS, only 28 states regulate in favor of the employee on wage garnishments cases when it comes to employee discharge ;

WHEREAS, all 50 states limit wage garnishment on child support to benefit family priorities;

WHEREAS, only 19 states prohibit employee discharge for wage garnishment, with only 6 of these 19 states that specify that there is no limit on the number of wage garnishments cases the employee can face before discharge ;

THEREFORE, BE IT RESOLVED, that NHCSL encourages state legislators to put forth and support public policies that favor workers facing wage garnishment;

BE IT FURTHER RESOLVED, that NHCSL encourages policies that improve access to loans without employment reprisals;

BE IT FURTHER RESOLVED, that NHCSL encourages policies that would not affect the employer or the debtor when it comes to wage garnishment;

BE IT FINALLY RESOLVED that NHCSL encourages policymakers to repeal discriminatory practices against those more vulnerable to debt and, instead promote policies that strengthen employment security in garnishment cases by:

• Considering the number of family members;
• Ensuring that the amount deducted from income is adequate for the employees’ quality of life.

THIS RESOLUTION WAS ADOPTED ON APRIL 30, 2017, AT THE NHCSL EXECUTIVE COMMITTEE MEETING HELD IN WASHINGTON, DC.

1. https://www.fair-debt-collection.com/state-wage-garnishments.html

2. Ibid.

3. Automatic Data Processing Research Institute: “Garnishment: The Untold Story”, p.4 https://www.adp.com/tools-and-resources/adp-research-institute/insights/~/media/RI/pdf/Garnishment-whitepaper.ashx

4. https://www.fair-debt-collection.com/state-wage-garnishments.html