CFPB’s New Interpretive Rule Clarifies Federal Preemption of State Credit Reporting Laws, Revokes 2022 Interpretive Rule, by Richard J. Perr, Esq.,11-5-2025,
The Consumer Financial Protection Bureau (CFPB) recently published an interpretive rule (effective October 28, 2025) clarifying that the Fair Credit Reporting Act (FCRA) generally preempts state laws that regulate consumer credit reporting.
This rule replaces a July 2022 interpretive rule that the Bureau previously withdrew in May 2025. While non-binding, the rule signals that state statutes — including those limiting medical-debt reporting — may face preemption challenges, potentially shaping litigation and enforcement risk.
Overview of the New Interpretive Rule
The CFPB’s interpretive rule generally asserts that the FCRA’s federal framework governing credit reporting supersedes most state statutes that attempt to regulate the information, process, or criteria for reporting consumer credit information—including medical debt—on credit reports.
In explaining this position, the CFPB in its interpretive rule notes that “the main preemption provision of the FCRA, 15 U.S.C. 1681t(b)(1), uses carefully crafted language to preempt several areas of State law that it intended to be governed solely by Federal law. The lead paragraph states that “[n]o requirement or prohibition may be imposed under the laws of any State . . . with respect to any subject matter regulated under” certain sections or subsections of the FCRA.”
The CFPB further highlights that Congress’s use of expansive phrases such as “with respect to” and “relating to” demonstrates an intent for broad preemptive scope. By contrast, the Bureau explains, the 2022 interpretive rule “failed to properly interpret the plain text of section 1681t(b)(1)” and “erroneously concluded that it had a narrow sweep.”
Ultimately, the new interpretive rule reflects the CFPB’s effort to promote national consistency in credit reporting standards and reduce the potential for conflicting state regulations.
Litigation Implications for State Medical Debt Statutes
While the issuance of this rule does not affect the legal status of any existing state law, the rule could potentially open the door for litigants to challenge states that have enacted statutes specifically restricting the reporting of medical debt on credit files. State laws that purport to prohibit or limit the inclusion of medical debt in credit reports may now face preemption claims, providing grounds for legal challenges and potentially impacting regulatory enforcement and consumer protection efforts at the state level.
Reflecting this expectation of judicial testing, the agency in the interpretive rule notes that “parties understand that guidance, including the 2022 rule, is non-binding. Parties interested in the application of FCRA preemption to particular State laws can litigate such questions in court.”
States with Statutes Prohibiting Medical Debt on Credit Reports
To be sure, several states have implemented laws designed to protect consumers from having medical debt reported on their credit reports. Among these are:
Given the CFPB’s new interpretive rule, these states’ statutes are now in question, pending judicial interpretation regarding FCRA preemption. Entities subject to both federal and state requirements should closely monitor developments and anticipate possible court challenges that could shape the applicability and future of these state laws.
Immediate attention to compliance protocols and legal strategy is advised in light of potential litigation and regulatory shifts triggered by this development.
Author: Richard J. Perr, Co-Managing Partner of Kaufman Dolowich’s Philadelphia office and Co-Chair of KD’s Financial Services & Institutions Practice Group
