CFPB affirms states’ ability to police credit reporting markets

Today, the Consumer Financial Protection Bureau issued an interpretive rule affirming states’ abilities to protect their residents through their own fair credit reporting laws. The CFPB rule explains that, 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. The agency writes that the Act does not stop states from enacting laws to tackle credit reporting problems related to medical debt, tenant screening, and other consumer risks.

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 CFPB rule is here.

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