CFPB Interpretive Rule Clarifies States’ Ability to Implement Credit Reporting Regulations

On June 28, 2022, the Consumer Finance Protection Bureau (“CFPB”) issued an interpretive rule clarifying the provisions of the Fair Credit Reporting Act’s (“FCRA”). Under this interpretation, the CFPB clarified that the express preemption provisions of the Act have a “narrow and targeted scope” with respect to state credit reporting regulations.

Specifically, the CFPB clarified states have great opportunity to pass regulations involving consumer credit reporting that are specific to the issues impacting their economies and citizens without fear of being preempted by the FCRA. As such, states are free to impose stricter credit reporting requirements on their state than those imposed by the FCRA, so long as said requirement is not expressly preempted by or “inconsistent with” the FCRA.

According to a statement given by CFPB Director Rohit Chopra, “Given the intrusive surveillance that Americans face every day, it is critical that states can protect their citizens from abuse and misuse of data,  . . . [t]he legal interpretation issued today makes clear that federal law does not automatically hit delete on state data protections.”

The CFPB interpretive rule provided the following examples of state law provisions that they believe could be posed by states in an appropriate fashion such that they are not at risk of preemption:

• a State law forbidding consumer reporting agencies from including information about medical debt, evictions, arrest records, or rental arrears in a consumer report (or from including such information for a certain period of time);

• a State law prohibiting “furnishers from furnishing such information to consumer reporting agencies;

• a State law requiring “that a consumer reporting agency provide information required by the FCRA at the consumer’s requests in languages other than English[.]”