The CFPB formally confirmed Monday that the Fair Credit Reporting Act (FCRA) generally preempts state laws touching on wide areas of credit reporting, replacing a 2022 interpretive rule the agency said was flawed and created confusion.
The new interpretive rule emphasized Congress’ long-standing intent to establish national standards for the credit reporting system by preventing a “patchwork” of differing state regulations. It pointed to statutory language barring states from imposing requirements “with respect to any subject matter regulated” under multiple FCRA provisions, covering issues from prescreening to dispute procedures, adverse-action notices and the content of consumer reports.
The Bureau argued the withdrawn 2022 rule incorrectly took a “narrow sweep” approach that underestimated how broadly federal law already preempts states. That prior rule had suggested states could regulate areas such as medical debt, rental data and arrest records; an interpretation the CFPB now said contradicted the plain text of the statute and legislative history.
The filing stressed the agency lacked delegation from Congress to issue preemption determinations in the first place, unlike under laws such as the Truth in Lending Act, and that the guidance was non-binding on courts. As a result, “parties interested in the application of FCRA preemption to particular state laws can litigate such questions in court,” the Bureau wrote, noting the withdrawal does not alter the legal status of any state law.
Head of Regulatory Advocacy, James Akin, with America’s Credit Unions said the organization appreciates the CFPB’s efforts this year to provide credit unions regulatory clarity and reduce compliance burdens. Akin added, “With the Bureau’s confirmation of its earlier rescission of the 2022 interpretive rule, credit unions now have a clearer, more uniform standard for preemption under the Fair Credit Reporting Act. Credit unions are the financial marketplace's original consumer protectors and remain committed to ensuring a fair, transparent credit reporting system."
The CFPB contended rescinding the 2022 rule will reduce compliance burdens by restoring clarity and reinforcing that federal law is the controlling source of requirements for credit reporting nationwide.
The new interpretation is scheduled to take effect upon publication in the Federal Register.
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