CFPB Interpretive Rule Clarifies FCRA Preemption: What This Means For Your Organization
On October 28, 2025, the Consumer Financial Protection Bureau (CFPB or Bureau) published an interpretive rule opining that the Fair Credit Reporting Act (FCRA) preempts state laws that address certain enumerated subjects governed by the federal statute. This interpretive rule essentially replaces the Bureau’s 2022 interpretive rule, which had interpreted FCRA’s preemption as much more limited. The CFPB formally withdrew the 2022 interpretive rule in May 2025 as part of the agency’s broader rollback of past guidance (which I wrote about here). The CFPB issued this new interpretive rule to “confirm the withdrawal of the 2022 interpretive rule” and to clarify that “FCRA generally preempts State laws that touch on broad areas of credit reporting.”
The Bureau’s New Interpretation and Rationale
The Bureau states in this new interpretive rule that FCRA’s preemption provision was designed to create a national standard for credit reporting and to avoid inconsistent state-level regulation. The rule focuses on FCRA’s preemption provision 15 U.S.C. § 1681t(b)(1), which provides that “no requirement or prohibition may be imposed under the laws of any State with respect to any subject matter regulated under” certain FCRA provisions. Those provisions cover topics such as information contained in consumer reports, prescreening, accuracy disputes, adverse action notices, and furnisher responsibilities.
The CFPB states in this interpretive rule that “its prior interpretation was manifestly wrong” and that the 2022 interpretive rule “musters no justification for reading section 1681t(b)(1) in a limited manner.” The CFPB took issue with the prior interpretive rule’s interpretation of the phrase “with respect to” as limiting the preemption available, and its reliance on a prior Supreme Court case, Dan's City Used Cars, Inc. v. Pelkey, interpreting the use of that phrase in a different statute’s preemption provision.
The CFPB explained that Congress’s use of expansive language such as “no requirement or prohibition,” “with respect to,” and “relating to” shows that it intended preemption to apply broadly. The CFPB also stated that the 2022 rule’s interpretation of the aforementioned Supreme Court case’s holding regarding the phrase “with respect to” was wrong, because the other statute’s preemption provision used the phrase to add a second requirement for a state law to be preempted, which second requirement was the basis of the Court’s interpretation, not some inherent limiting effect of the phrase “with respect to.” The Bureau also cited as support for its interpretation legislative history from the 1996 and 2003 amendments to FCRA, which emphasized the goal of maintaining a consistent national credit reporting framework to promote economic growth and uniformity.
Under the CFPB’s new interpretive rule, state laws addressing the same subject matter as FCRA provisions, such as what information can appear in a credit report or how furnishers must report data, are preempted. While the CFPB noted that it does not have special authority to issue binding preemption determinations, as such determinations are left to the courts, it stated that clarity was needed after the 2022 rule created confusion in the marketplace and raised compliance costs.
Implications for the Mortgage Industry
All companies in the financial services industry that deal with consumer reports should take note of this interpretive rule. It may be prudent for companies to revisit their compliance obligations under state laws regulating the enumerated subjects in FCRA, especially for companies that may be facing state enforcement or litigation, because it appears that the CFPB now views most state laws addressing topics such as credit reporting content, adverse action notices, furnisher obligations, and prescreening as preempted. For example, it may be worth asking new questions, such as whether certain state law adverse action notice requirements are preempted. Courts and other regulatory agencies may give weight to the CFPB’s new interpretive rule on this issue.
In addition, this interpretive rule provides insight into how the CFPB views its responsibility to revisit and correct past interpretations of the CFPB. By using language such as “manifestly wrong,” the CFPB is signaling that it will not hesitate to revisit and publicly recant past interpretations of the CFPB. If your organization would like the CFPB to revisit a past interpretation that was not withdrawn in the prior guidance purge (which I wrote about here), you may consider approaching the CFPB to request a review of that interpretation.
If you would like assistance with this process or have questions about this interpretive rule, please email me at rich@garrishorn.com.
