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On October 28, the CFPB issued an interpretive rule under the Fair Credit Reporting Act (FCRA)declaring that federal law generally preempts state laws governing the content of consumer credit reports. The Bureau's action, led by Acting Director Russell Vought, replaces and withdraws a July 2022 interpretive rule issued under the prior administration, which had concluded that the FCRA's preemption provisions were limited in scope.
The Bureau stated that the FCRA's preemption clause uses "broad and categorical" language that bars states from enacting laws in areas already regulated by the Act, such as information contained in consumer reports and the responsibilities of furnishers. The agency emphasized that Congress intended to establish a uniform national standard for credit reporting and warned that state-by-state regulation could create a "patchwork" that undermines the national credit system.
Putting It Into Practice: The CFPB's interpretive rule marks a reversal from the Bureau's prior position under the 2022 interpretation, now asserting that the Fair Credit Reporting Act broadly preempts state regulation of credit-report content. With multiple states recently enacting laws prohibiting the inclusion of medical debt on consumer credit reports (previously discussed here, here, andhere), this interpretation would effectively nullify those measures.States may face legal challenges from industry groups relying on the Bureau's new stance.Financial institutions and consumer-reporting agencies should review multi-state compliance frameworks in light of this shift and monitor related litigation as federal preemption is tested in court.
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