CFPB Confirms Federal Preemption of State Credit Reporting Laws

The CFPB published an interpretive rule on Oct. 28, 2025, clarifying the scope of preemption under the Fair Credit Reporting Act (FCRA) and impact on state laws regarding credit reporting. The interpretive rule replaces a 2022 interpretive rule published under former CFPB Director Rohit Chopra that was subsequently withdrawn in May 2025.

The FCRA governs requirements concerning the creation and use of consumer reports. Though the FCRA has consistently preempted state law, the scope of preemption has been amended on numerous occasions since the FCRA was enacted in 1970. In 1996, Congress expanded the FCRA's preemption of any state laws that are inconsistent with any provision of the FCRA to emphasize and expand the scope of preemption to any state "regulation related to specifically enumerated subjects already regulated by the FCRA." Though the "strong preemption provision" was set to expire in 2004, Congress permanently incorporated the "national standards" 2003 in an effort "to promote economic growth."

The "main preemption provision of the FCRA," 15 U.S.C. § 1681t(b)(1) outlines a number of subjects that states are prohibited from contradicting. Specifically, "[n]o requirement or prohibition may be imposed under the laws of any State … 'relating to'":

• the prescreening of consumer reports
• the time by which a consumer reporting agency must take any action related to the disputed accuracy of information in a consumer's file
• the duties of a person who takes any adverse action with respect to a consumer
• 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 consists of a firm offer of credit or insurance
• information contained in consumer reports
• the responsibilities of persons who furnish information to consumer reporting agencies
• information available to victims of identity theft
• the exchange and use of information to make a solicitation for marketing purposes
• the duties of users of consumer reports to provide notice with respect to terms in certain credit transactions
• security freezes
• credit monitoring for active-duty military consumers

Unnecessary Rule

The July 2022 interpretive rule published under the Biden Administration reduced the scope of federal preemption under the FCRA to conclude that "section 1681t(b)(1) does not preempt all State laws relating to the content or information contained in consumer reports" because "[t]he 'with respect to' phrase necessarily reaches a subset of laws narrower than those that merely relate to information contained in consumer reports." Therefore, under the July 2022 interpretive rule, a state law was not preempted by the FCRA unless it specifically targeted an enumerated requirement or obligation under the FCRA provision.

When the Trump Administration returned to Washington, D.C., and began its efforts to "reduce compliance burdens rather than increase them," the CFPB withdrew the July 2022 interpretive rule, as Holland & Knight previously reported, based on its conclusion that the July 2022 interpretive rule was neither necessary nor did it reduce compliance burdens. The October 2025 interpretive rule implements the positions taken in the CFPB's May 2025 guidance withdrawal notice, which, as Holland & Knight previously reported, announced the intention to eliminate any interpretive rule or guidance document that exceeded the scope of the CFPB's rulemaking authority.

The October 2025 interpretive rule emphasizes that "agencies have no special authority to pronounce on pre-emption absent delegation by Congress," a position reaffirmed by the U.S. Supreme Court decision isolating statutory interpretation within the jurisdiction of the courts. Therefore, as the "FCRA does not compel – or even authorize – the Bureau to provide its legally binding views on preemption," the July 2022 interpretive rule improperly "sowed confusion into the credit reporting system by creating a patchwork quilt of federal and state laws competing to govern the marketplace." The CFPB found that the narrow reading of preemption in the July 2022 interpretive rule risked fragmenting the national credit reporting system by allowing states to impose differing regimes, which would raise compliance costs and undermine lenders' ability to evaluate consumers uniformly. By reaffirming that the FCRA preemption clause is intentionally broad, "no requirement or prohibition" under any state law may be imposed "with respect to any subject matter regulated under" certain FCRA provisions, the CFPB's position suggests that many state laws touching on content, furnishing, prescreening and information in consumer reports may be preempted. The CFPB highlighted that as "the application of FCRA preemption to particular State laws" is a matter to be litigated in court, the July 2022 interpretive rule did not meet the "current standards for the issuance of guidance," and accordingly, must be withdrawn.

This decision is the latest development regarding the CFPB's utilization of the rulemaking process in order to curtail the scope of the agency's authority. As the CFPB awaits a decision from the U.S. Court of Appeals for the District of Columbia Circuit regarding the agency's ability to reduce its operations via reductions in force, the October 2025 interpretive rule reconfirms the agency's commitment toward identifying areas that implement unnecessary compliance burdens.

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