The American Financial Services Association (AFSA) recently filed an amicus brief in Maine federal court in support of the motion for judgment on the record filed by the Consumer Data Industry Association (CDIA) in CDIA’s lawsuit seeking a declaratory judgment that two 2019 amendments to Maine’s credit reporting law are preempted by the federal Fair Credit Reporting Act.

One of the amendments prohibits a consumer reporting agency (CRA) from reporting medical debt on a consumer’s credit report until a delinquency is at least 180 days old.  Once a CRA receives “reasonable evidence” that a medical debt has been settled or paid in full, the CRA may not report the debt and must “remove or suppress” it from the consumer report.

The second amendment requires a CRA to reinvestigate a debt if the consumer provides documentation that the debt is the result of “economic abuse.”  If the CRA finds that the debt is the result of such abuse, it must remove any reference to the debt from the consumer report.  “Economic abuse” is defined to mean “causing or attempting to cause an individual to be financially dependent by maintaining control over the individual’s financial resources” and includes “unauthorized or coerced use of credit or property” and “stealing from or defrauding of money or assets.”

In its amicus brief, AFSA argues that the Maine amendments are preempted under the FCRA’s express preemption provisions.  Those provisions preempt any state laws relating to information that is excluded from or must be disclosed in credit reports and any state laws that impose requirements or prohibitions with respect to conduct required by the FCRA when a consumer alleges that information in his or her credit file resulted from identity theft.

AFSA also argues that provisions such as the Maine amendments undermine the FCRA by producing a non-uniform credit-reporting system that is based on state-specific policy concerns.  It contends that such a patchwork of state regulations would require lenders to have state-specific underwriting rules, thereby increasing compliance costs and reducing credit availability.