New Interpretive Rule: FCRA Preemption
It appears the Bureau has replaced an older interpretive rule concerning the Fair Credit Reporting Act's (FCRA) preemption power over conflicting state rules.
On October 28, 2025, the CFPB published an Interpretative Rule to clarify that the FCRA generally preempts state laws that attempt to regulate broad areas of credit reporting. You can find the new interpretive rule here. If you recall, the older interpretive rule, issued in 2022, was withdrawn back in May of 2025, pursuant to an Executive Order (13891) from the Trump administration. America's Credit Unions covered the withdrawal of this rule, here.
Background
On July 11, 2022, the CFPB published an interpretative rule to purportedly clarify "that FCRA's express preemption provisions have a narrow and targeted scope. States therefore retain substantial flexibility to pass laws involving consumer reporting to reflect emerging problems affecting their local economies and citizens." Emphasis added. However, as the new Administration campaigned to restore statutory interpretation powers back to the judiciary, the CFPB withdrew this 2022 interpretive rule, because it concluded the former agency leadership misinterpreted the FCRA's preemption provisions.
On May 15, 2025, the CFPB published a superseding interpretive rule rescinding the earlier interpretative rule. The CFPB notes that the official withdrawal of the 2022 interpretative rule restores statutory limits on states' authority and aligns enforcement actions with the original legislative intent of the Consumer Financial Protection Act.
Effect on Credit Unions?
The new interpretive rule published in October of 2025 confirms the withdrawal of the 2022 interpretative rule and provides a new alternative interpretation. This new rulemaking appears to align with the Trump Administration's push to deregulate. The CFPB reaffirms that it is "committed to issuing guidance only where that guidance is necessary and would reduce compliance burdens rather than increase them." (Emphasis added).
For financial institutions, including federal credit unions, the Trump Administration withdrew the 2022 rule to lessen the "confusion [sown] into the credit reporting system by creating a patchwork quilt of federal and state laws competing to govern the marketplace." Emphasis added. The agency remarked that neither the CFPB, nor other federal agencies, have authority to opine or essentially interpret preemption powers, because that is an exclusive judiciary function.
The Administration deviated from the old 2022 rule's interpretation that the preemption clause has a narrow sweep. Instead, the new rule emphasizes that Section 1681t(b)(1) of the FCRA has a broad sweeping preemption power concerning state laws. Or, in other words, "Congress meant to occupy the field of consumer reporting and displace State laws within that field," and "sweep away" most State regulations purporting to regulate the same areas of governance as the FCRA.
Although not binding on state attorneys general, the 2025 interpretive rule reflects the CFPB's shift toward a less aggressive approach in enforcement matters. The financial system industry as a whole may likely see a decrease in joint federal-state enforcement actions with respect to FCRA violations.
For any questions concerning how this rule directly affects practices at your credit union concerning FCRA reporting requirements, you may want to consult with your credit union's counsel. For any questions concerning this blog, please reach out to the Compliance Team at compliance@americascreditunions.org.