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NAFCU, along with several other organizations, Monday filed an amicus brief with the U.S. Supreme Court asking the Court to review a recent decision from the U.S. Court of Appeals for the First Circuit and to consider whether the Fair Credit Reporting Act (FCRA) preempts the state of Maine’s credit reporting laws.

NAFCU, alongside the Chamber of Commerce, Bank Policy Institute, American Financial Services Association, and American Bankers Association filed the brief.

The two state laws of concern are:

1. a medical-debt provision, which prohibits a consumer reporting agency from reporting medical debt on a consumer report “when the date of the first delinquency on the debt is less than 180 days prior to the date that the debt is reported,” or when the reporting agency has “reasonable evidence” that the debt has been “settled” or “paid in full.” It also requires the reporting agency to report medical debt “in the same manner as debt related to a consumer credit transaction” if the consumer is “making regular, scheduled period payments toward” that debt; and
2. an economic-abuse provision, which bars reporting debts resulting from “economic abuse” if the consumer “provides documentation” of the economic abuse and a subsequent investigation confirms that abuse.

The amicus brief argues that both laws establish requirements concerning what information regarding certain debts may or may not be included in a consumer report, and as a result are preempted by the plain language of the FCRA.

“If the First Circuit’s approach stands, each State will be able to craft its own rules for the contents of credit reports, potentially creating a patchwork of at least 50 different types of credit reports,” wrote the organizations in the brief. This result would be burdensome for furnishers, like credit unions and banks, who would have to establish unique underwriting rules and processes for each state.

NAFCU will continue to monitor FCRA regulations and litigation and share updates with credit union members.