On June 28, 2022, the CFPB issued an interpretive rule affirming states’ abilities to protect their residents through their own fair credit reporting laws. With limited preemption exceptions, states have the flexibility to preserve fair and competitive credit reporting markets by enacting state-level laws that are stricter than the federal Fair Credit Reporting Act (FCRA).
According to the CFPB, the FCRA does not stop states from enacting laws to tackle credit reporting problems related to medical debt, tenant screening, and other consumer risks. The agency also stated that Congress made clear that the FCRA preempts only narrow categories of state laws. With this, CFPB’s interpretive rule clarifies that:
States retain broad authority to protect people from harm due to credit reporting issues. As an example, a state could prohibit a credit reporting company from including information about a person’s medical debt for a certain period of time after the debt was incurred.
State laws are not preempted unless they conflict with the FCRA or fall within narrow preemption categories enumerated within the statute. Nothing in the FCRA generally preempts state laws relating to the content or information contained in credit reports. for example, it does not preempt state laws governing whether eviction information or rental arrears appears in the content of credit reports.
The agency’s announcement is part of the CFPB’s work to support the role of states to protect consumers and honest businesses. In one of our articles, we wrote about the CFPB issuing an interpretive rule on enforcement of consumer protection laws.
Read the CFPB’s full release here.