CFPB Announces New Interpretive Rule Clarifying Scope of FCRA Preemption
The Consumer Financial Protection Bureau (CFPB) announced an interpretive rule yesterday that clarifies the scope of the Fair Credit Reporting Act’s (FCRA) preemption of state laws that touch on the area of credit reporting. In implementing this rule, the CFPB confirmed its May 2025 withdrawal of its July 2022 interpretive rule, which sought to limit the scope of federal preemption under the FCRA. The new rule reasserts the CFPB’s view that the FCRA’s primary preemption clause — 15 U.S.C. § 1681t(b)(1) — sweeps broadly, displacing most state laws that regulate the “subject matter” of the statute’s enumerated provisions.
FCRA Preemption and the CFPB’s July 2022 Interpretive Rule
Section 1681t(b)(1) of the FCRA provides that “[n]o requirement or prohibition may be imposed under the laws of any State . . . with respect to” or “relating to” various subject matters enumerated in the preemption provision. The CFPB’s 2022 interpretive rule took a narrow view of the phrases “with respect to” and “relating to,” concluding that, “unless a State law specifically concerned a requirement or obligation addressed in the enumerated FCRA provision, it was not preempted.”
For example, the 2022 interpretive rule suggested that, because section 1681t(b)(1)(E) preempts state laws “with respect to any subject matter regulated under” section 1681c, “relating to information contained in consumer reports,” there would be no preemption beyond the four topics of information enumerated in Section 1681c (i.e., obsolescence, certain information about medical information furnishers, certain information about veterans’ medical debt, and certain information that must be included in a consumer report). The CFPB’s 2022 rule therefore left significant room for state regulation in areas such as medical debt reporting, rental data, and arrest records.
The CFPB Reverses Course and Confirms Broad Preemption Under the FCRA
The CFPB cited multiple reasons in support of its rejection of the 2022 interpretive rule: (i) Congress’s use of “broad and expansive phrases” in Section 1681t(b)(1) indicates that “Congress meant to occupy the field of consumer reporting and displace State laws within that field”; (ii) the 2022 rule contradicted judicial interpretations of Section 1681t(b)(1); (iii) the legislative history of Section 1681t(b) confirms that Congress intended to create broad preemption and avoid “a patchwork of State laws”; and (iv) the 2022 rule risked undermining the credit-reporting market if states created their own disparate standards, which would increase compliance costs for consumer reporting agencies (CRA), end-users, and furnishers.
The CFPB also specifically took issue with the 2022 rule’s conclusion that “although how long the specific types of information listed in section 1681c may continue to appear on a consumer report is a subject matter regulated under section 1681c, what or when items generally may be initially included on a consumer report is not a subject matter regulated under section 1681c.” Under this rationale from the 2022 interpretive rule, states would be entitled to prohibit CRAs from reporting entire categories of information, such as medical debt, arrest records, rental arrears, or convictions.
The CFPB rejected its prior distinction between obsolescence periods and categories of information, explaining that “how long information can remain on a credit report and whether the information can be included in the credit report in the first place are two points on the same continuum.” The CFPB cited an “extreme example” to support its view, noting that application of the 2022 rule would result in preemption of a state law imposing a one-day obsolescence period for medical debt information — but entirely permit a law prohibiting medical debt from appearing on a report in the first place. For this reason, the CFPB concluded that the 2022 interpretive rule was flawed, even under its own logic and narrower construction of Section 1681t(b)(1).
Takeaways
In implementing its new interpretive rule, the CFPB has clarified its view that “the fact that a State law touche[s] upon the same subject matter as the one addressed by the FCRA preemption clause” is sufficient to find preemption. While the interpretive rule “does not have the force or effect of law,” it offers FCRA defendants new opportunities to invoke federal preemption as a shield against state-law claims in the credit reporting space. In particular, the interpretive rule strengthens arguments that state laws prohibiting certain categories of information from appearing in consumer reports are preempted by Section 1681t(b)(1).
