| Entities | |
| Topics and Issues | FOIA (11) Maine (1) New Jersey (2) Preemption (11) Texas (1) |
In June 2022, the CFPB issued a press release announcing the release of an “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).” The interpretive rule is available online, The Fair Credit Reporting Act’s Limited Preemption of State Laws.
According to the Bureau, “[t]he issuance of today’s rule arises from the Office of the New Jersey Attorney General notifying the CFPB of pending litigation that included an allegation the FCRA preempted a New Jersey consumer protection statute.” We presume that this is CDIA’s litigation against the state in CDIA v. Bruck.
Director Chopra said that “[g]iven the intrusive surveillance that Americans face every day, it is critical that states can protect their citizens from abuse and misuse of data. The legal interpretation issued today makes clear that federal law does not automatically hit delete on state data protections.”
The press release continues:
The federal statute leaves states with the flexibility to consider and enact laws that reflect challenges and risks affecting their local economies and residents. For example, tenant screening reports may contain questionable or incorrect information that impedes renters’ access to housing. States are able to enact protections against abuse and misuse of data to mitigate these consequences.
Congress made clear that the Fair Credit Reporting Act preempts only narrow categories of state laws. As federal regulators learned from the 2007-2008 mortgage crisis and ensuing Great Recession, federal preemption of state laws can stop state regulators from identifying dangerous patterns and mitigating market risks. Accordingly, today’s interpretive rule makes clear:
- States retain broad authority to protect people from harm due to credit reporting issues: For example, a state could forbid 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 Fair Credit Reporting Act or fall within narrow preemption categories enumerated within the statute: Preemption under the Fair Credit Reporting Act is narrow and targeted. Nothing in the statute generally preempts state laws relating to the content or information contained in credit reports. It does not preempt, for instance, state laws governing whether eviction information or rental arrears appears in the content of credit reports.
The Bureau’s announcement is part of the CFPB’s work to support the role of states to protect consumers and honest businesses. On May 19, the CFPB issued an interpretive rule that describes states’ authorities to pursue lawbreaking companies and individuals under the Consumer Financial Protection Act. The CFPB will continue to consider other steps to promote state enforcement of fair credit reporting along with other parts of federal consumer financial protection law. These steps include consulting with states whenever interpretation of federal consumer financial protection law is relevant to a state regulatory or law enforcement matter, consistent with the State Official Notification Rule.
Within hours of the release of the interpretive rule, HudsonCook, a D.C.-based law firm, filed a FOIA request with the Bureau seeking copies of all records relating to the Bureau’s interpretive rule.