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CFPB says states can police credit reporting markets

The CFPB yesterday announced it has 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).

The interpretive rule states that:

  • 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 issuance of yesterday'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.

  • UPDATE ON PUBLICATION AND EFFECTIVE DATE: Published at 87 FR 41042 on 7/11/2022; effective upon publication
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