On October 27, the Consumer Financial Protection Bureau (CFPB) formally confirmed that the Fair Credit Reporting Act (FCRA) broadly preempts state laws on credit reporting. You may be wondering what this means for your medical practice’s accounts in collections and how this will change the landscape going forward. To learn more about that, we first need to look at how this new interpretive rule came about in the first place.

How We Got Here

After being established in 1970, the FCRA has gone through several amendments to modernize it as the consumer reporting landscape changed. The FCRA has always preempted state law, that is, its provisions have always overruled state guidance. Over time, however, the exact scope of this preemption has changed. The FCRA has so far only preempted laws that were directly inconsistent with its provisions, meaning that states were free to issue their own laws so long as they did not contradict the FCRA’s regulations.

One example of this is how various states handle medical debt and credit reporting. The FCRA does not have any specific provisions regarding how medical debt should be addressed, so many states have developed their own laws in the interest of protecting consumers. Fifteen states have passed laws limiting or completely banning credit reporting on medical debt, while the rest treat medical debt mostly like any other type of debt.

Back in July 2022, the CFPB issued an interpretive rule stating that the FCRA has a limited preemptive scope, allowing states to continue to pass and enforce their own credit reporting laws where they didn’t explicitly conflict with FCRA provisions. However, this rule was withdrawn in May 2025.

The October 27 issuance is what the CFPB is replacing the 2022 interpretation with, stating that the old rule was unnecessary, confusing, and burdensome. This new issuance attempts to restore standardization across the country by making states comply with the letter of the FCRA only, no longer allowing for interpretation by individual states.

What This Means For You

This rule has the potential to significantly impact your medical practice. If you’re located in a state where medical debt credit reporting has been banned or restricted, you may be eager to start credit reporting, or have your debt collection agency do the same.

However, the rule is still quite new, and for now, state regulations are still in play. Interpretive rules such as this one are considered guidance, and it’s the courts that will determine exactly how this provision will impact the law. Over the coming months, you can expect to see many groups challenging (consumers, advocacy groups) or defending (medical practices, banks) the new rule in court. Already, the American Collectors Association (ACA) has filed suit, challenging Colorado’s House Bill 23-1126; the country’s first state law prohibiting the reporting of medical debt information on credit reports.

In the meantime, debt collection agencies—including us at FFR—will operate as usual, following state laws where they apply while simultaneously keeping an eye on unfolding legal cases and upcoming legislation. The landscape has been in flux for some time, but FFR will keep up with any and all regulatory changes, keep you informed as needed, and continue to collect compliantly and compassionately.