On October 28, 2025, the Consumer Financial Protection Bureau (CFPB) published a new “preemption” rule in the Federal Register. The agency clarified its view that the Fair Credit Reporting Act (FCRA) preempts state law related to the handling and maintenance of consumers’ credit reports. It is important because it replaces (and effectively reverses) a 2022 CFPB rule that held that federal preemption related to the FCRA was narrow. Broader preemption prevents individual states from enacting stricter regulations for credit reports. At The Kim Law Firm, LLC, our FCRA attorneys help consumers understand and assert their rights under the FCRA. 

Background: What is Preemption?

As a starting point, it is important to understand what preemption is and how it works from a legal perspective. Broadly explained, preemption is the legal doctrine that allows a higher level of government to displace or override the laws of a lower level. Under American law, preemption is generally an issue that impacts the extent to which states can make regulations that are different from federal law. Federal preemption arises under the Supremacy Clause of the U.S. Constitution. When Congress enacts legislation within its constitutional authority, federal law controls even if a state or local rule points in another direction. Courts apply several forms of preemption, including express preemption, field preemption, and conflict preemption. 

Preemption analysis focuses on legislative intent and operational conflict. A state or local rule becomes unenforceable if it frustrates the purposes or objectives of the governing federal statute. In other words, a federal court could find that a state law, in some manner, differs from the purpose of federal law and that it effectively undermines federal law in the process. On those grounds, the state law (or local law) can be ruled unconstitutional and unenforceable. As a simple example, there is a federal motor carrier safety rule that requires mandatory brake-inspection intervals for commercial trucks. If a state enacts a different interval that forces carriers to follow a conflicting timeline, the federal rule controls the matter because simultaneous compliance is impossible. That state law would be “preempted,” and it would be unenforceable. 

The New CFPB Rule Holds that the FCRA Broadly Preempts Federal Law

In October of 2025, the CFPB issued an interpretive rule that clarifies the scope of federal preemption under the FCRA. The rule states that the FCRA generally preempts state laws that impose “any requirement or prohibition.” In issuing this interpretive rule, the agency revoked its prior (July 2022) guidance that took a far more narrow view of preemption. The CFPB explained that the older rule was flawed in light of the statute’s plain language and legislative history. 

Under the new rule, the CFPB affirms its view that Congress designed the FCRA’s preemption clause for broad coverage and to avoid a patchwork of state-by-state regulation of credit reporting. The interpretive rule does not itself invalidate any state law. Instead, it signals that parties can invoke more robust arguments that many state statutes (particularly those regulating the content of consumer reports) may be vulnerable to preemption challenges in court. 

What Does this Actually Mean for Consumers (Certain State Laws May Be Challenged)

Preemption is a highly technical legal issue. For many consumers, it can be difficult to parse what exactly has changed. The key point to know is that the CFPB’s old view was that the individual states could make laws that are “more consumer friendly” and that go beyond the protections offered by the FCRA. The CFPB’s new view is that states generally cannot do so, and the federal law (most notably, the FCRA) is the nationwide standard for credit reports. There are basically two issues where certain states are enacting more strict, comprehensive, and “consumer-friendly” credit report-related regulations that currently exist under the federal FCRA. Here is an overview of both of them: 

• Reporting of Medical Debt: Several states have adopted statutes that broadly restrict when and how medical debt can appear on consumer reports. These laws often impose waiting periods, mandate item-level verification, or prohibit reporting certain categories of medical obligations altogether. Under the CFPB’s new preemption interpretation, any state rule that regulates the content, timing, or furnishing of medical-debt information may now fall within the scope of 15 U.S.C. § 1681t(b)(1). That provision broadly bars state requirements that conflict with federal standards governing accuracy, completeness, and permissible reporting periods. The legal question becomes whether the state restriction regulates the same subject matter already covered by the FCRA. If so, the rule faces a significant risk of being preempted. Federal courts will analyze statutory text, operational impact, and whether the state rule attempts to add new obligations beyond the federal framework. 
• Reporting of Criminal Records: There are a number of different states that have also enacted aggressive limits on reporting criminal-history information. Some restrict the reporting of records older than a defined number of years. Others bar reporting of dismissed charges, non-convictions, or expunged matters. The FCRA already regulates “adverse information” through maximum reporting periods and accuracy obligations. Under the CFPB’s updated approach, state laws that impose additional filtering, timing, or record-classification rules may be treated as regulating the same subject matter addressed in 15 U.S.C. § 1681c. A court could view these statutes as attempts to create stricter content-control requirements than the federal scheme permits. If so, they may be vulnerable to facial or as-applied preemption challenges. 

It is important to clarify that the CFPB’s preemption rule is an interpretive statement. It does not carry the force of law in the way that a duly promulgated regulation would under the Administrative Procedure Act (APA). Courts are not required to defer to it. That is not to say that the interpretive guidance is irrelevant. It matters. Federal judges often consider an agency’s reading of a statute when analyzing preemption, especially when the agency administers that statute. If a state medical-debt or criminal-record reporting law is challenged, the new CFPB interpretation may be cited as persuasive authority. It could influence how a court evaluates the scope of the FCRA preemption claim. Some state statutes may be more vulnerable to legal challenges. 

What Consumers Should Take Away From the Policy Guidance

The previous view of the CFPB was that individual states have considerable deference to enact credit report regulations that provide consumers in their jurisdiction with additional protection beyond what is offered by the Fair Credit Reporting Act. The CFPB’s current view is that individual states actually only have very limited authority to regulate credit reports. 

Some state statutes related to credit reports (such as state-level restrictions on the reporting of medical debt or criminal records) may be challenged on the grounds that they are preempted by federal law. Still, this is interpretative guidance. Courts are not required to follow the view of the CFPB. Even if a state law is challenged on preemption grounds, a court will need to review the specific nature of the regulation to determine whether or not it is unenforceable. 

You Can Use the FCRA to Correct Credit Report Errors and Get Compensation

Consumers often feel overwhelmed when a credit report contains inaccurate information. The Fair Credit Reporting Act gives you concrete rights. Even if certain state laws may be more vulnerable to legal challenges, it is crucial to know that the FCRA is still a very powerful tool for consumers. The law creates real obligations for credit reporting agencies and the furnishers that supply them with data. The statute is technical, but it is designed to give you tools you can actually use. Do not assume that you are powerless. Here are some key things to know about your rights and your options under the federal FCRA: 

• You Have a Right to a Free Copy of Your Credit Report: Federal law lets you request free reports from each major credit bureau every year. You can access them through AnnualCreditReport.com. As a general rule, there is no need to pay for a copy of your credit report. You can generally get them for free to review them on a periodic basis. The right matters because you cannot dispute an error you have not seen. You should review every page carefully. Look for incorrect personal information, duplicate accounts, outdated debts, or fraudulent activity. 
• You Have a Right to File a Formal Dispute Directly With the Credit Bureau: The FCRA requires credit bureaus to investigate disputes that are submitted with enough detail. Your dispute should identify the specific item and explain why it is inaccurate. Attach supporting documents. The bureau must complete its investigation within 30 days. If it cannot verify the account or the information is wrong, it must correct or delete the item. That correction is binding on all future reports.
• You Have a Right to Ensure that Furnishers Conduct Their Own Investigation: Banks, lenders, medical providers, and debt collectors are furnishers. When they receive a dispute from a credit bureau, they must perform a separate investigation. They must review relevant records and provide updated information. If they confirm an error, they must notify all credit bureaus. A failure to investigate can itself violate the FCRA. This creates an additional layer of protection for consumers.
• You Have a Right to Have Inaccurate Information Corrected or Removed: The FCRA does not allow a bureau or furnisher to “leave the item as-is” if they cannot verify accuracy. Any unverifiable account must come off the report. This requirement applies even if the furnisher believes the debt might exist but cannot produce documentation. The statute focuses on verifiable accuracy. That standard helps prevent old, incomplete, or speculative information from harming you.
• You Have a Right to Seek Damages for Willful or Negligent Violations: The FCRA provides compensation when a credit bureau or furnisher fails to meet its duties. If the violation is negligent, you can seek actual damages, including harm to your credit, higher interest rates, or financial losses. If the violation is willful, you can also seek statutory damages, punitive damages, and attorney’s fees. Courts require proof, so detailed documentation of your disputes is essential.

A big area of concern is that credit report mistakes do not stay isolated. Small errors can cause real problems. What is on your credit report can affect major life decisions. A single inaccurate delinquency can result in a denied mortgage, higher auto premiums, or lost employment opportunities. These are real-world consequences. They can be the basis of an FCRA claim. FCRA cases can be hard to navigate. The right lawyer can help. A consumer protection attorney can evaluate your dispute history, gather documentation, and build the strongest possible claim. The dispute process is not just about fixing one item. It is about restoring your overall financial reputation. Clean credit reports help you secure better interest rates, qualify for housing, and reduce long-term borrowing costs. Your attorney can pursue compensation for your damages. 

How Our Credit Report Error Lawyer Can Help You Use the FCRA to Protect Your Rights

The FCRA is among the most important federal consumer protection laws. If there is an error on your credit report, it is imperative that you take immediate action to protect your rights and your interests. Navigating FCRA cases can be challenging. You do not have to figure out everything on your own. Richard H. Kim is a top-rated credit report error lawyer. With extensive experience handling FCRA cases, Attorney Kim provides personalized, effective advocacy to consumers. 

Contact Our FCRA Attorney for a Completely Confidential Consultation

At The Kim Law Firm, LLC, our FCRA lawyers are skilled, knowledgeable, and committed to protecting the rights and interests of consumers. If you have any questions or concerns about how to challenge a credit report error, we are here to help. Call us today or contact us online for a completely confidential, no obligation initial case review. An error on your credit report can cause you financial harm. It is time to fight back. We provide FCRA representation nationwide.