Particle.news
Download on the App Store

CFPB Reverses Course, Says FCRA Preempts State Rules on Credit Report Content

Issued as interpretive guidance under Acting Director Russell Vought, the reversal positions recent state medical-debt reporting bans for legal scrutiny.

Overview

  • The interpretive rule took effect October 28 and declares that federal law generally bars states from dictating what information appears in consumer reports.
  • The CFPB withdrew its July 2022 interpretation that had read FCRA preemption narrowly and now reads Congress as intending to occupy the field.
  • The bureau cites risks of a 50-state patchwork, higher compliance costs, and reduced comparability for lenders if states set differing content rules.
  • Recent state laws excluding medical debt from credit files are now in doubt and may face challenges from industry relying on the new federal stance.
  • Because the action is interpretive, it bypassed notice-and-comment, and courts will ultimately determine the scope of preemption under the FCRA.