James Francis, a partner at Francis Mailman Soumilas in Philadelphia. Courtesy photo
When courts or administrative agencies opine on whether a federal statute preempts state law, they usually do so in the wake of the statute’s enactment. But the U.S. Consumer Financial Protection Bureau’s (CFPB) interpretive rule issued mid-summer regarding the Fair Credit Reporting Act’s limited preemption of state laws comes 52 years after the FCRA became law, and 11 years after the Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB.
For state regulators, the wait might have been worth it. In its interpretive rule, the CFPB endorsed states’ abilities to enact their own fair credit reporting laws to protect their residents. The rule clarifies that the FCRA’s express preemption provisions have a narrow and targeted scope, and that states therefore retain “substantial flexibility” to enact consumer reporting laws that “reflect emerging problems affecting their local economies and citizens.” And, by flagging medical debt, eviction histories, and rental arrears as examples of information state fair credit reporting laws could prohibit, the CFPB all but greenlights to state legislatures the areas of credit reporting it would like to see them regulate. (My partner John Soumilas recently wrote about the CFPB’s efforts to curb unlawful medical debt collection.)
The FCRA Has Narrow Express Preemption Provisions
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