[Federal Register Volume 90, Number 206 (Tuesday, October 28, 2025)]
[Rules and Regulations]
[Pages 48710-48715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-19671]
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CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1022
Fair Credit Reporting Act; Preemption of State Laws
AGENCY: Consumer Financial Protection Bureau.
ACTION: Interpretive rule.
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SUMMARY: The Consumer Financial Protection Bureau (Bureau) is issuing
this interpretive rule to clarify that the Fair Credit Reporting Act
(FCRA) generally preempts State laws that touch on broad areas of
credit reporting, consistent with Congress's intent to create national
standards for the credit reporting system. This interpretive rule
replaces a July 2022 interpretive rule that the Bureau withdrew in May
2025.
DATES: This interpretive rule is applicable on October 28, 2025.
FOR FURTHER INFORMATION CONTACT: Dave Gettler, Paralegal Specialist,
Office of Regulations, at 202-435-7700. If you require this document in
an alternative electronic format, please contact
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Fair Credit Reporting Act (FCRA)--which was enacted in 1970 and
has been amended several times since--sets forth certain requirements
``concerning the creation and use of consumer reports.'' \1\ The FCRA
has always preempted State law, but the scope of that preemption has
changed
[[Page 48711]]
over time. Since its inception, the FCRA has preempted State laws ``to
the extent that those laws are inconsistent with any provision of'' the
FCRA.\2\ But in 1996, Congress emphasized that FCRA standards were
national by adding a provision that further preempted any State
regulation related to specifically enumerated subjects already
regulated by the FCRA.\3\ This was ``a strong preemption provision''
that was meant to ``to avoid a patchwork system of conflicting
regulations.'' \4\ This newly added subject matter preemption provision
was originally designed to expire in 2004. But in 2003, Congress made
it permanent,\5\ looking to preserve the FCRA's ``national standards''
in order to promote economic growth.
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\1\ Spokeo, Inc. v. Robins, 578 U.S. 330, 335 (2016).
\2\ Public Law 91-508 sec. 601, 84 Stat. 1136 (later codified at
15 U.S.C. 1681t(a)).
\3\ Public Law 104-208 sec. 2419, 110 Stat. 3009.
\4\ Ross v. FDIC, 625 F.3d 808, 813 (4th Cir. 2010) (quotation
marks and citation omitted).
\5\ Public Law 108-159 sec. 711, 117 Stat. 2011.
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The main preemption provision of the FCRA, 15 U.S.C. 1681t(b)(1),
uses carefully crafted language to preempt several areas of State law
that it intended to be governed solely by Federal law. The lead
paragraph states that ``[n]o requirement or prohibition may be imposed
under the laws of any State . . . with respect to any subject matter
regulated under'' each of the eleven subparagraphs. Each subparagraph
then includes a provision of the FCRA followed by the phrase ``relating
to'' and then a description of the subject matter of that provision.
In full, section 1681t(b)(1) says that ``[n]o requirement or
prohibition may be imposed under the laws of any State with respect to
any subject matter regulated under'' certain sections or subsections of
the FCRA:
(a) Subsection (c) or (e) of section 1681b, relating to the
prescreening of consumer reports;
(b) Section 1681i, relating to the time by which a consumer
reporting agency must take any action, including the provision of
notification to a consumer or other person, in any procedure related to
the disputed accuracy of information in a consumer's file, [with an
exception for laws in effect on September 30, 1996];
(c) Subsections (a) and (b) of section 1681m, relating to the
duties of a person who takes any adverse action with respect to a
consumer;
(d) Section 1681m(d), relating to the duties of persons who use a
consumer report of a consumer in connection with any credit or
insurance transaction that is not initiated by the consumer and that
consists of a firm offer of credit or insurance;
(e) Section 1681c, relating to information contained in consumer
reports, [with an exception for laws in effect on September 30, 1996];
(f) Section 1681s-2, relating to the responsibilities of persons
who furnish information to consumer reporting agencies [with exceptions
for certain enumerated State laws];
(g) Section 1681g(e), relating to information available to victims
under section 1681g(e);
(h) Section 1681s-3, relating to the exchange and use of
information to make a solicitation for marketing purposes;
(i) Section 1681m(h), relating to the duties of users of consumer
reports to provide notice with respect to terms in certain credit
transactions;
(j) Subsections (i) and (j) of section 1681c-1 relating to security
freezes; or
(k) Subsection (k) of section 1681c-1, relating to credit
monitoring for active duty military consumers, as defined in that
subsection.
On July 11, 2022, the Bureau published an interpretive rule
purporting to analyze section 1681t(b)(1), finding that it has ``a
narrow sweep,'' which allows for substantial State regulation of
consumer reports and consumer reporting agencies.\6\ The 2022
interpretive rule declared that ``section 1681t(b)(1) does not preempt
all State laws relating to the content or information contained in
consumer reports.'' \7\ According to the interpretive rule, ``[t]he
`with respect to' phrase necessarily reaches a subset of laws narrower
than those that merely relate to information contained in consumer
reports.'' \8\ The interpretive rule thus concluded that unless a State
law specifically concerned a requirement or obligation addressed in the
enumerated FCRA provision, it was not preempted.
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\6\ The Fair Credit Reporting Act's Limited Preemption of State
Laws, 87 FR 41042 (July 11, 2022).
\7\ Id. at 41044.
\8\ Id. (internal quotation marks and citation omitted).
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For example, 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.'' Section
1681c states requirements on four topics relating to information
contained in consumer reports: 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 interpretive rule reasoned that section
1681t(b)(1)(E) does not preempt State laws about subject matter
regarding the content of or information on consumer reports beyond
these topics. Applying this logic, the interpretive rule specifically
identified a number of areas in which States could regulate consistent
with the interpretive rule's view of the FCRA, including medical debt,
rental information, and arrest records.\9\
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\9\ Id. at 41044-41046.
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The 2022 rule also examined 15 U.S.C. 1681t(b)(5), another
preemption clause in the FCRA, and concluded that it too has a narrow
scope.
On May 12, 2025, the Bureau withdrew a substantial number of
guidance documents, including the 2022 interpretive rule.\10\
Consistent with the May notice, the Bureau is now confirming the
withdrawal of the 2022 interpretive rule. The Bureau is also clarifying
that the FCRA generally preempts State laws that touch on broad areas
of credit reporting, consistent with Congress's intent to create
national standards for the credit reporting system.
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\10\ Interpretive Rules, Policy Statements, and Advisory
Opinions; Withdrawal, 90 FR 20084 (May 12, 2025).
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II. Withdrawal of 2022 Interpretive Rule
When the Bureau withdrew its guidance documents in May 2025, the
Bureau explained that it is ``committed to issuing guidance only where
that guidance is necessary and would reduce compliance burdens rather
than increase them.'' \11\ The Bureau has reviewed the 2022
interpretive rule that interprets sections 1681t(b)(1) and 1681t(b)(5)
of the FCRA, and the Bureau now confirms the withdrawal of that rule.
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\11\ Id. at 20085.
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The 2022 rule is neither necessary nor does it reduce compliance
burdens. The Supreme Court has recently reaffirmed that courts are the
ultimate arbiters of statutory meaning,\12\ and in particular
``agencies have no special authority to pronounce on pre-emption absent
delegation by Congress.'' \13\ It was unnecessary for the Bureau in
2022 to opine on the scope of preemption under the FCRA. The FCRA does
not compel--or even authorize--the Bureau to provide its legally
binding views on preemption. That stands in contrast to other statutes
administered by the Bureau, which do delegate such authority to the
Bureau.\14\ Nor did the 2022 rule ease compliance burdens. To
[[Page 48712]]
the contrary (and as explained below), the 2022 rule sowed confusion
into the credit reporting system by creating a patchwork quilt of
federal and state laws competing to govern the marketplace.
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\12\ See Loper Bright Enters. v. Raimondo, 603 U.S. 369, 412-13
(2024).
\13\ Wyeth v. Levine, 555 U.S. 555, 577 (2009).
\14\ 15 U.S.C. 1610(a) (allowing the Bureau to make preemption
determinations under the Truth in Lending Act that carry the force
of law).
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Therefore, having completed its review, the Bureau has determined
that the 2022 rule does not meet its current standards for the issuance
of guidance. Additionally, consistent with its May 2025 guidance
withdrawal notice, the Bureau does not believe that reliance interests
compel the retention or reissuance of the 2022 rule. Parties understand
that guidance, including the 2022 rule, is non-binding. Parties
interested in the application of FCRA preemption to particular State
laws can litigate such questions in court. The 2022 rule was not
binding on the public or courts, and the withdrawal of the 2022 rule
will have no effect on the legal status of any State law.
For these reasons, the Bureau is exercising its discretion to
confirm the withdrawal of the 2022 interpretive rule on preemption
under the FCRA.
III. The 2022 Rule's Interpretation of Section 1681t(b)(1) Was Flawed
As noted above, agencies do not have special expertise in
interpreting preemption clauses, and the 2022 rule should not have done
so with respect to the scope of preemption under the FCRA. In addition
to withdrawing the 2022 rule, the Bureau now clarifies that its prior
interpretation was manifestly wrong. The 2022 interpretive rule
contradicted the plain text of section 1681t(b)(1), ignored the
legislative history of the preemption clause, and reflected a misguided
policy choice that would undermine the credit reporting system and
credit markets.
A. Section 1681t(b)(1) Has a Broad Sweep
The plain text of a preemption clause will ``necessarily contain[ ]
the best evidence of Congress' preemptive intent.'' \15\ The 2022
interpretive rule failed to properly interpret the plain text of
section 1681t(b)(1) and erroneously concluded that it had a narrow
sweep. The plain text leads to the opposite conclusion: Congress's use
of broad and categorical language shows that it intended the clause to
apply expansively.
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\15\ Chamber of Commerce of U.S. v. Whiting, 563 U.S. 582, 594
(2011) (internal quotation marks and citation omitted). When a
statute contains an express preemption clause--like section
1681t(b)(1)--there is no need to invoke a presumption against
preemption. Puerto Rico v. Franklin California Tax-free Tr., 579
U.S. 115, 125 (2016).
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As noted above, the relevant statutory text says that ``[n]o
requirement or prohibition'' may be imposed by a State ``with respect
to any subject matter regulated under'' a specified provision of the
FCRA, which provision is then followed by the phrase ``relating to''
and then a description of the subject matter of that provision. For
example, section 1681t(b)(1)(E) says that States can impose ``[n]o
requirement or prohibition . . . with respect to any subject matter
regulated under . . . section 1681c, relating to information contained
in consumer reports.''
In crafting section 1681t(b)(1), Congress chose a series of broad
and expansive phrases. To begin with, the phrase ``[n]o requirement or
prohibition'' in the context of preemption ``sweeps broadly'' and
applies to all State laws, whether enacted by a legislature or decreed
by a common-law court.\16\ Next, a phrase like ``with respect to'' also
``has a broadening effect, ensuring that the scope of a provision
covers not only its subject but also matters relating to that
subject.'' \17\ The word ``any,'' when ``[r]ead naturally,'' also has
``an expansive meaning, that is, one or some indiscriminately of
whatever kind.'' \18\ A ``subject matter'' is generally defined as an
``issue presented for consideration'' or ``the thing in dispute.'' \19\
Finally, ``the phrase `relate to' in a preemption clause express[es] a
broad pre-emptive purpose,'' and is typically used by Congress ``to
reach any subject that has a connection with, or reference to, the
topics the statute enumerates.'' \20\
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\16\ Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 521 (1992)
(plurality op.).
\17\ Lamar, Archer & Cofrin, LLP v. Appling, 138 S. Ct. 1752,
1760 (2018) (interpreting ``respecting''); see also United States v.
Tohono O'Odham Nation, 563 U.S. 307, 312 (2011) (``in respect to'').
\18\ United States v. Gonzales, 520 U.S. 1, 5 (1997) (quoting
Webster's Third New International Dictionary 97 (1976)).
\19\ Subject matter, Black's Law Dictionary (12th ed. 2024).
\20\ Coventry Health Care of Missouri, Inc. v. Nevils, 581 U.S.
87, 96 (2017) (internal quotation marks and citations omitted).
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Read together, these ``deliberately expansive'' \21\ terms can mean
only one thing: Congress meant to occupy the field of consumer
reporting and displace State laws within that field. By preempting laws
respecting the ``subject matter'' of some of FCRA's broadest
provisions--and then defining that subject matter in broad terms
through the ``relating to'' clause--Congress plainly meant to sweep
away most State regulation in the area.
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\21\ Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987).
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For example, section 1681t(b)(1)(E) says that States can impose
``[n]o requirement or prohibition . . . with respect to any subject
matter regulated under . . . 1681c,'' that is ``relating to information
contained in consumer reports.'' So section 1681t(b)(1)(E) first
identifies that laws touching on the subject matter of 1681c are
preempted. It proceeds to say that these are laws ``relating to
information contained in consumer reports,'' and the fact that this
phrase is the verbatim title of 1681c is a clear indication that
Congress is clarifying the subject matter of 1681c. And that subject
matter is broad--it covers the inclusion of information in consumer
reports. All State laws on that subject are preempted.
As another example, section 1681t(b)(1)(F) preempts any State law
``with respect to any subject matter regulated under section 1681s-2 of
this title, relating to the responsibilities of persons who furnish
information to consumer reporting agencies.'' This provision identifies
that laws touching on the subject matter of 1681s-2 are preempted. It
proceeds to say that these are laws ``relating to the responsibilities
of persons who furnish information to consumer reporting agencies,''
and again that phrase is the verbatim title of 1681s-2. Thus, any State
law that concerns the responsibilities of furnishers is preempted.
Notably, Congress knew how to craft narrower preemption clauses in
the FCRA. For example, in a separate clause, the FCRA preempts any
State law ``with respect to the frequency of any disclosure under
section 1681j(a) [the free annual credit report].'' \22\ Had Congress
meant for section 1681t(b)(1) to have a similarly narrow sweep,
Congress would have chosen that kind of narrow, targeted language. But
it purposefully chose a broader approach with section 1681t(b)(1), and
the scope of preemption under section 1681t(b)(1) must accordingly be
interpreted expansively.
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\22\ 15 U.S.C. 1681t(b)(4).
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B. The 2022 Interpretive Rule's Reading of Section 1681t(b)(1) Was
Flawed
The 2022 interpretive rule musters no justification for reading
section 1681t(b)(1) in a limited manner. It claimed that if Congress
had meant to occupy the field so broadly, it would have used more
categorical language. However, as explained above, it would be hard to
imagine language more categorical than section 1681t(b)(1).
[[Page 48713]]
Instead of giving proper effect to the broad language of section
1681t(b)(1), the 2022 interpretive rule wrongly concluded that the
``with respect to'' phrase has a limited effect. According to that
rule, ``the phrase `with respect to any subject matter regulated under'
is an important limiting factor'' on the scope of preemption'' and
``reaches a subset of laws narrower than those that merely relate to
information contained in consumer reports. It narrows the universe of
preemption only to those laws that concern the subject matter regulated
under the enumerated FCRA sections.'' \23\ Thus, according to the 2022
rule, ``if a State law does not `concern' the subject matters regulated
under the FCRA sections specified in section 1681t(b)(1), it is not
preempted by that clause.'' \24\
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\23\ 87 FR at 41044 (citations and quotation marks omitted).
\24\ Id.
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The case on which the interpretive rule principally relied, Dan's
City Used Cars, Inc. v. Pelkey,\25\ does not support the rule's
conclusion that the ``with respect to'' clause must be construed
narrowly. In Dan's City, the Supreme Court considered the preemption
clause in the Federal Aviation Administration Authorization Act
(FAAAA), which prohibits enforcement of State laws ``related to a
price, route, or service of any motor carrier . . . with respect to the
transportation of property.'' \26\ The Court compared the FAAAA's
preemption clause with that of the Airline Deregulation Act of 1978
(ADA), which displaces any State law ``related to a price, route, or
service of an air carrier.'' \27\ In comparing the FAAAA's preemption
clause to the ADA's, the Court noted that the ``with respect to''
phrase ``massively limits the scope of preemption ordered by the
FAAAA.'' It was ``not sufficient that a state law relates to the
`price, route, or service' of a motor carrier in any capacity; the law
must also concern a motor carrier's `transportation of property.' ''
\28\
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\25\ 569 U.S. 251 (2013).
\26\ 49 U.S.C. 14501(c)(1).
\27\ 49 U.S.C. 41713(b)(1).
\28\ Dan's City, 569 U.S. at 261.
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Contrary to the interpretive rule, Dan's City merely ``offered the
straightforward observation that the addition of the second requirement
in the FAAAA preemption provision `massively limits the scope of
preemption' of that provision in comparison to the ADA's preemption
provision--not because `with respect to' carries some inherent limiting
meaning but because the FAAAA reduced the scope of preemption vis-
[agrave]-vis the ADA by doubling the boxes a law must check before it
is preempted.'' \29\ Nothing in Dan's City requires that the ``with
respect to'' phrase be given an artificially narrow meaning.
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\29\ Aargon Agency, Inc. v. O'Laughlin, 70 F.4th 1224, 1248 (9th
Cir. 2023) (VanDyke, J. dissenting).
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The 2022 interpretive rule's reading of section 1681t(b)(1) also
contradicts the canon against surplusage, which provides that ``every
word and every provision is to be given effect [and that n]one should
needlessly be given an interpretation that causes it to duplicate
another provision or to have no consequence.'' \30\ Rather than giving
full effect to every part of section 1681t(b)(1), the 2022 rule
effectively reads ``the relating to'' clause out of the statute. If--as
the 2022 rule says--the scope of preemption under section 1681t(b)(1)
is bounded by the requirements or obligations in the specific section
enumerated in the ``with respect to'' clause, then the ``relating to''
cause has no work to do. It is entirely descriptive and redundant. By
contrast, under a proper reading of the provision, the ``with respect
to'' and ``relating to'' clauses complement each other: the ``with
respect to'' clause identifies the FCRA provision whose subject matter
is preempted and the ``relating to'' clause defines the scope of that
subject matter.
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\30\ Nielsen v. Preap, 586 U.S. 392, 414 (2019).
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Many courts evaluating the scope of FCRA preemption have not read
section 1681t(b)(1) as narrowly as the 2022 interpretive rule. Instead,
they have properly interpreted FCRA's preemption clause to broadly
preempt the general subject matter that is identified by the clause.
For instance, in Premium Mortgage Corp. v. Equifax, Inc.,\31\ the
plaintiff mortgage lender brought State-law claims against several
consumer reporting companies for selling pre-screened reports
containing trigger leads to other mortgage lenders. The claims included
misappropriation of trade secrets, fraud, unfair competition, tortious
interference with contract, breach of contract, and unjust enrichment.
The court concluded that these claims were preempted because they
``relate[ ] to the prescreening of consumer reports.'' \32\ The court
did not ask whether the claims addressed requirements or obligations in
section 1681b(c) or (e). Likewise, in Ross v. FDIC,\33\ the Tenth
Circuit determined that the plaintiff's State law claims against a bank
for furnishing inaccurate information to a credit bureau were preempted
by section 1681t(b)(1)(F) because they ``concern[ the] reporting of
inaccurate credit information to CRAs.'' Again, the court did not
perform a granular review of section 1681s-2.\34\
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\31\ 583 F.3d 103 (2d Cir. 2009) (per curiam).
\32\ Id. at 106.
\33\ 625 F.3d at 813.
\34\ See also Scott v. First Southern National Bank, 936 F.3d
509, 522 (6th Cir. 2019) (State law claims were preempted because
they ``concern [the] reporting of consumer credit information to
consumer reporting agencies''); Okocha v. HSBC Bank USA, N.A., 700
F. Supp. 2d 369, 375 (S.D.N.Y. 2010). (``at a minimum and pursuant
to the plain language of the statute, Section 1681t preempts state
law with respect to Furnisher conduct governed by Section 1681s-
2''); Loomis v. U.S. Bank Home Mortg., 912 F. Supp. 2d 848, 854 (D.
Ariz. 2012) (a State law was preempted because the State law at
issue and 1681s-2 ``both address the responsibilities of a provider
of credit information to credit reporting agencies.''); Phillips v.
Fort Fam. Invs. & Pro. Debt Mediation, Inc., 2025 WL 57483, at *3
(M.D. Fla. Jan. 9, 2025) (State law claims preempted because they
``relate to duties of FFI and PDM as furnishers of information'').
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In these cases, the fact that a State law touched upon the same
subject matter as the one addressed by the FCRA preemption clause was
enough for the court to make a preemption determination; there was no
need to specifically interrogate which actions or ideas were discussed
in the FCRA provision itself. These holdings cannot be squared with the
logic of the 2022 rule.\35\
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\35\ Other courts have reached the same conclusion as the 2022
interpretive rule about the scope of section 1681t(b)(1). See Aargon
Agency, 70 F.4th at 1235; Consumer Data Indus. Ass'n v. Frey, 26
F.4th 1, 7 (1st Cir. 2022); Galper v. JP Morgan Chase Bank, N.A.,
802 F.3d 437, 446 (2d Cir. 2015). But those decisions are flawed for
the same reasons as the 2022 interpretive rule, incorrectly relying
on Dan's City for the proposition that the ``with respect to''
clause limits the scope of preemption. For the reasons discussed
above, the ``with respect to'' clause does no such thing.
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C. The Legislative History of Section 1681t(b) Also Confirms Its Broad
Sweep
Legislative history ``need not be consulted when, as here, the
statutory text is unambiguous.'' \36\ But even the legislative history
of section 1681t(b) confirms that Congress intended to broadly displace
State laws on consumer reporting.
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\36\ United States v. Woods, 571 U.S. 31, 46 n.5 (2013).
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As noted above, when the FCRA was enacted in 1970, it preempted
only conflicting State laws. Congress expanded FCRA preemption when it
first enacted section 1681t(b) in 1996, reaching a wide swath of State
laws that were more protective than the FCRA. However, in those 1996
amendments, Congress clarified that this broader provision would not
apply to any State law that ``(A) is enacted after January 1, 2004; (B)
states explicitly that the provision is intended to supplement [the
FCRA]; and (C) gives greater protection to consumers than is
[[Page 48714]]
provided under [the FCRA].'' \37\ In 2003, however, Congress made
permanent section 1681t(b), deleted the sunset-provision applying to
laws giving ``greater protection to consumers,'' and added a new
preemption clause.\38\ In short, since 1970 Congress has continually
expanded FCRA preemption.
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\37\ Public Law 104-208 sec. 2419(2), 110 Stat. 3009.
\38\ Public Law 108-159 sec. 711, 117 Stat. 2011.
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The congressional debates that led to the 1996 and 2003 laws also
reflect this pattern of expanding FCRA preemption. When section
1681t(b) was first added to the FCRA in 1996, Members of Congress made
clear that the preemption clause was intended to usher in a national
credit reporting system. As noted by Senator Richard Bryan (one of the
sponsors of the Senate version of the 1996 amendments), ``When
representatives of the business community approached us about the need
for uniformity in this area, they stressed the need to preempt multiple
States' laws while a new Federal law demonstrated its effectiveness.''
\39\ As Representative Castle explained, to meet that need the 1996
amendments to the FCRA ``recognize[d] that the credit industry is now a
complex, nationwide business'' and established ``a uniform, national
standard for credit reporting.'' \40\ The broad preemption under
section 1681t(b) would ``allow businesses to comply with one law on
credit reports rather than a myriad of State laws,'' thereby
``benefit[ting] consumers and businesses.'' \41\ In other words, the
preemption clause was specifically intended to avoid ``a patchwork of
State laws.'' \42\
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\39\ 140 Cong. Rec. S. 8942 (Sen. Bryan May 2, 1994).
\40\ 140 Cong. Rec. 25871 (Sept. 27, 1994).
\41\ Id.
\42\ 140 Cong. Rec. 25867 (Sept. 27, 1994) (Rep. Thomas).
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But Congress also implemented a sunset-provision for the preemption
clause in case a national credit reporting system did not ultimately
result in the expected benefits. The probationary period ``should
provide adequate time to demonstrate whether these Federal standards
are sufficient'' \43\ and ``test the viability of a uniform national
standard.'' \44\ But ``[if] after 8 years the Federal law is not
adequately protecting consumers,'' Congress ``expect[ed] States to step
in once again and do the job.'' \45\
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\43\ 140 S. 8942 (Sen. Bryan May 2, 1994).
\44\ 140 Cong. Rec. 25866 (Rep. Kennedy).
\45\ Id.
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In 2003, Congress decided to make permanent section 1681t(b) in
order to ``enhance the national credit reporting system.'' \46\ As
Representative Kanjorski noted, the 1996 amendments had ``created a
nationwide consumer credit system that works increasingly well,'' by
``expand[ing] access to credit, lower[ing] the price of credit, and
accelerat[ing] decisions to grant credit.'' \47\ The key to this
nationwide credit system was ``the establishment of the uniform system
that preempts States from enacting miscellaneous and potentially
conflicting requirements regarding credit reporting.'' \48\ The
```miracle of instant credit' created by our national credit reporting
system has given American consumers a level of access to financial
services and products that is unrivaled anywhere in the world,'' said
Representative Oxley, adding that ``[t]he protection and growth of
these services, as provided for in this legislation, are critical to
the success of our economy.'' \49\ Senator Shelby, one of the sponsors
of the 2003 bill, argued that the legislation was ``creating permanent
national standards'' for the ``national credit reporting system,''
which he also noted was important to ``our financial markets and
economy as a whole.'' \50\
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\46\ H.R. Rep. 108-396 (conference report).
\47\ 149 Cong. Rec. 21742 (Sept. 10, 2003).
\48\ Id.
\49\ 149 Cong. Rec. 30771 (Nov. 21, 2003).
\50\ 149 Cong. Rec. 26890 (Nov. 4, 2003).
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Thus, as the conference report for the 2003 law noted, the
amendments would ``ensure the operational efficiency of our national
credit system by creating a number of preemptive national standards.''
\51\ Congress recognized the ``significant concern . . . that [these
national standards] preclude states from adopting more robust consumer
protections'' but nonetheless concluded that ``[n]ational credit
markets are necessary to meet business and consumer demands and are
very important to the efficient operation of the United States
economy.'' \52\
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\51\ H.R. Rep. 108-396.
\52\ S. Rep. 108-166.
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In summary, the legislative history of both the 1996 and 2003
amendments corroborates the plain text of section 1681t(b)(1). Congress
clearly intended for that preemption clause to have a broad sweep.
D. The 2022 Interpretive Rule Undermines the Functioning of the
Consumer-Reporting Market
Although it is clear that Congress' intention in enacting section
1681t(b) was to ``enhance'' the national credit reporting system
through national standards, the 2022 interpretive rule risked
fracturing that system by allowing each State to create its own
standards.
In enacting the FCRA, Congress recognized that ``[t]he banking
system is dependent upon fair and accurate credit reporting'' and that
``[c]onsumer reporting agencies have assumed a vital role in assembling
and evaluating consumer credit and other information on consumers.''
\53\ The FCRA's purpose was thus ``to require that consumer reporting
agencies adopt reasonable procedures for meeting the needs of commerce
for consumer credit, personnel, insurance, and other information in a
manner which is fair and equitable to the consumer, with regard to the
confidentiality, accuracy, relevancy, and proper utilization of such
information.'' \54\
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\53\ 15 U.S.C. 1681(a)(1), (3).
\54\ 15 U.S.C. 1681(b).
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Between the passage of the FCRA and the preemption amendments, the
American economy became more nationalized, supported in large part by
the development of a lending and credit-reporting system that crossed
State borders. As the conference report to the 2003 amendments noted,
``we live in a mobile society in which 40 million Americans move
annually. The FCRA permits consumers to transport their credit with
them wherever they go.'' \55\ Congress wanted to promote ``national
credit markets,'' and a national credit-reporting system was of
``seminal importance . . . for economic development.'' \56\ As Congress
recognized, ``these uniform national standards . . . operate in a very
fundamental way to expand the opportunity for consumers to get access
to credit and a broad range of financial services. What they really do
is allow you to take your reputation with you as you travel around the
country.'' \57\
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\55\ H.R. Rep. 108-396.
\56\ S. Rep. 108-166.
\57\ Id. (quoting witness testimony of John Snow).
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This purpose--and its accompanying benefits to the economy--risked
being sacrificed by the 2022 interpretive rule's reading of the FCRA's
preemption clause, with harmful consequences to consumers. Under the
interpretive rule's view of the FCRA, there can be 50-plus State
regulatory regimes governing credit reporting in addition to the
national standards established by Federal law. Having to comply with
those disparate regimes would impose substantial compliance costs on
consumer reporting agencies, users of credit reports, and furnishers of
credit report information, turning what is currently a cohesive
national market into dozens of regional markets. It
[[Page 48715]]
would lead to ``a patchwork system of conflicting regulations,'' which
the preemption clause was meant to ``avoid.'' \58\ The content of a
consumer's credit report could vary depending on the State in which
they resided. Thus, instead of the unified national credit market that
we have today, lending and underwriting decisions would have to be
based in part on where a borrower lives, since the information
available to a creditor making a lending decision could be better or
worse depending on the borrower's State. The utility of credit reports
would be undermined because lenders would no longer be able to
accurately compare consumers across the country. Thus, instead of being
able to ``transport their credit with them wherever they go,''
consumers could be stuck with the credit options where they live. As a
result, the cost of credit would be likely to increase under the 2022
rule's interpretation. For instance, if some State laws were to limit
the types of adverse information that could be included in a credit
report, lenders may not be able to accurately identify the riskiest
borrowers, which in turn could lead to a cross-subsidy by good credit
risk borrowers for worse credit risk borrowers. Or for example, if
regulation of credit reports is fragmented by State, lenders may charge
more for credit in the States where regulation diverges from the
national standard in order to account for the reduced accuracy of
credit reports in those States.
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\58\ Ross v. FDIC, 625 F.3d at 813.
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E. At a Minimum, the 2022 Interpretive Rule Wrongly Concluded That
States Can Regulate the Presence of Certain Categories of Information
on a Consumer Report
Even if the 2022 interpretive rule were correct that the phrase
``with respect to any subject matter regulated under . . . section
1681c'' in section 1681t(b)(1)(E) means the granular topics addressed
by section 1681c (and not the general subject matter of ``information
contained in consumer reports''), the interpretive rule was still wrong
to conclude that States can validly regulate the presence of certain
categories of information--such as medical debt or arrest records--on a
consumer report.
Section 1681c provides guidelines for how long information can
remain on a credit report, including a general seven-year limitation
for any ``adverse item of information.'' \59\ The interpretive rule
reasoned 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.'' \60\ Thus, under the
interpretive rule, ``State laws relating to what or when items
generally may be initially included on a consumer report--or what or
when certain types of information may initially be included on a
consumer report--would generally not be preempted by section
1681t(b)(1)(E).'' \61\ According to the rule, States could thus forbid
consumer reporting agencies from reporting entire categories of
information, such as medical debt, arrest records, rental arrears, or
convictions.\62\
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\59\ 15 U.S.C. 1681c(a).
\60\ 87 FR at 41044.
\61\ Id.
\62\ Id. at 41044-41046.
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That reasoning is flawed, even on the 2022's interpretive rule's
own terms. The presence of information on a credit report is clearly a
subject matter regulated under section 1681c. To be sure, section 1681c
mainly addresses this subject matter through obsolescence periods, and
the 2022 rule recognizes that section 1681t(b)(1)(E) prohibits States
from changing the seven-year obsolescence period for negative
information on a credit report. But 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,
and the 2022's artificial distinction between them is arbitrary. To
take an extreme example, if a State established a one-day obsolescence
period for medical debt information (i.e., such information can remain
on a report only for a day), such a law would be preempted under the
2022 rule. But if a State were to prohibit medical debt from appearing
on a report in the first place, such a law would not be preempted under
the prior rule. It would make no sense to forbid the former but allow
the latter.
IV. Regulatory Matters
This is an interpretive rule issued under the Bureau's authority to
interpret the FCRA, including under section 1022(b)(1) of the Consumer
Financial Protection Act of 2010, which authorizes guidance as may be
necessary or appropriate to enable the Bureau to administer and carry
out the purposes and objectives of Federal consumer financial laws,
such as the FCRA.\63\
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\63\ 12 U.S.C. 5512(b)(1).
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As guidance, this interpretive rule does not have the force or
effect of law. It has no legally binding effect, including on persons
or entities outside the Federal government.
The Office of Information and Regulatory Affairs within the Office
of Management and Budget (OMB) has determined that this action is not a
``significant regulatory action'' under Executive Order 12866, as
amended.
Pursuant to the Congressional Review Act,\64\ the Bureau will
submit a report containing this interpretive rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the interpretive rule taking effect. OMB has designated this
interpretive rule as not a ``major rule'' as defined by 5 U.S.C.
804(2).
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\64\ 5 U.S.C. 801 et seq.
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The Bureau has determined that this interpretive rule does not
contain any new or substantively revised information collection
requirements that would require approval by OMB under the Paperwork
Reduction Act.\65\
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\65\ 44 U.S.C. 3501 et seq.
Russell Vought,
Acting Director, Consumer Financial Protection Bureau.
[FR Doc. 2025-19671 Filed 10-27-25; 8:45 am]
BILLING CODE 4810-AM-P