Maine Court Rules FCRA Preempts Amendments to State Credit Reporting Law

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On October 8, 2020, the United States District Court in the District of Maine ruled in Consumer Data Industry Association (CDIA) v. Frey & Lund that two 2019 amendments to the state’s credit reporting law were preempted by the federal Fair Credit Reporting Act (FCRA) and granted the motion for judgment filed by the plaintiff CDIA.

On May 8, 2019, “L.D. 110, An Act Regarding Credit Ratings Related to Overdue Medical Expenses” became law without the signature of Maine Governor Janet Mills. On June 21, 2019, “L.D. 748, An Act to Provide Relief to Survivors of Economic Abuse” was signed by Governor Mills. Both laws became effective on September 19, 2019.

L.D. 110 prohibited a consumer reporting agency (CRA) from reporting medical debt on a credit report until the delinquency was at least 180 days old. Once a CRA has received “reasonable evidence” that the medical debt was settled or paid, it could not report the debt and had to “remove or suppress” it from a consumer report.

L.D. 748 required a CRA to reinvestigate a debt – and remove it from a consumer report – if given documentation by the consumer that the debt was the result of “economic abuse” which is defined as “causing or attempting to cause an individual to be financially dependent by maintaining control over the individual’s financial resources.”

The Maine district court concluded both amendments were preempted under the FCRA’s express preemption provision that stated “(n)o requirement or prohibition may be imposed under the laws of any State… with respect to any subject matter regulated under…[15 U.S.C. 1681c], relating to information contained in consumer reports.”

Plaintiff CDIA is an international trade association founded in 1906. Its membership includes three nationwide CRAs – Experian, Equifax, and Trans Union – and other CRAs that furnish information about consumers. The CDIA participated in efforts leading to the enactment of the FCRA and every subsequent FCRA amendment.

Defendant Attorney General Aaron M. Frey is the state official responsible for enforcement through civil action of Maine’s FCRA under 10 M.R.S. § 1310-A. Defendant Superintendent William N. Lund is the state official responsible for the administration and enforcement of Maine’s FCRA under 10 M.R.S. § 1310-A.

Enacted by Congress in 1970, the FCRA 15 U.S.C § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, and protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information.

Employment Screening Resources® (ESR) – a leading global background check provider – offers background screening solutions that comply with the FCRA as well as whitepapers on how employers may avoid FCRA lawsuits and on how CRAs may avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.

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