The FCRA and State Law

The FCRA addresses its relationship with state law in a way that is typical of federal consumer protection laws. It says, in essence, that the federal law does not preempt any state law dealing with similar issues unless the state law is inconsistent with the federal law, and then only to the extent of the inconsistency. [15 USCS § 1681t(a)] The usual meaning of this sort of language is that state law is not preempted if it is more protective of the consumer. The FCRA, however, adds a little twist: It provides that certain rules in the FCRA preempt similar state law rules, even if the state law rule is more protective of the consumer. These FCRA rules are as follows:

  • Rules relating to the prescreening of consumer reports.
  • Rules relating to the time by which a consumer reporting agency must take any action in any procedure related to the disputed accuracy of information in a consumer’s file, except that this does not apply to any state law in effect on September 30, 1996.
  • Rules relating to the duties of a person who takes any adverse action with respect to a consumer.
  • Rules 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.
  • Rules relating to information contained in consumer reports, except that this does not apply to any state law in effect on September 30, 1996.
  • With some exceptions, rules relating to the responsibilities of persons who furnish information to consumer reporting agencies.
  • With some exceptions, rules relating to the exchange of information among affiliates.
  • Rules relating to the form and content of certain disclosures.
  • The FCRA definition of “firm offer” of credit or insurance.

[15 USCS § 1681t(b) and (c)]

These provisions of the FCRA are in effect regardless of what state law says. The FCRA goes on to say, however, that a state law will control even in these areas if the state law:

  • Is enacted after January 1, 2004;
  • States explicitly that the provision is intended to supplement the FCRA; and
  • Gives greater protection to consumers than is provided under the FCRA.

[15 USCS § 1681t(d)(2)]

In short, if a state wants its own law to govern instead of the FCRA provisions in this list—and it has no statute that predates September 30, 1996—it must enact new laws some time after January 1, 2004, explicitly state that the new law is replacing the relevant FCRA provisions, and make its law more protective of the consumer.