CFPB Issues Rule Clarifying States' Rights To Protect Consumers Through Fair Credit Reporting Laws

On June 28, the CFPB issued an interpretive rule affirming states' abilities to police credit reporting markets through the issuance of their own fair credit report laws. The interpretive rule clarifies that the Fair Credit Reporting Act (FCRA) does not prevent states from enacting their own fair credit reporting laws that are stricter and more protective of consumers. The FCRA defines the permissible use of credit reports, and establishes the guidelines of the information that can and should be included in those reports. However, the FCRA leaves to the states the flexibility to consider local challenges affecting consumers and economies, and enact laws to protect consumers by further regulating credit report guidelines and uses. State fair credit reporting laws are not preempted by the FCRA unless they directly conflict with the FCRA or fall within the narrow preemption categories directly enumerated in the statute, according to the interpretive rule.