• California Credit Reporting Act not Preempted by FCRA
  • March 10, 2009 | Author: Matthew Kasey Ratliff
  • Law Firm: Strasburger & Price, LLP - Dallas Office
  • Sanai v. Saltz, et al., 2009 Cal. App. LEXIS 83 (Cal. App. 2d Dist. Jan. 26, 2009)

    Facts: Plaintiff alleged violations of the California Consumer Credit Reporting Agencies Act (CCRAA) and the FCRA as well as state law claims related to Defendants’ reporting of Plaintiff’s unpaid rent to consumer reporting agencies (CRAs) regarding. The trial court granted Defendants’ motion for judgment on the pleadings based on the lack of a private cause of action under § 1681s-2 and preemption of Plaintiff’s state and common law claims. The appellate court reversed the judgment on the pleadings, finding that Plaintiff should have been allowed to replead his § 1681s-2 claim and that Plaintiff’s claims under the CCRAA were not preempted. Plaintiff’s state law claims were preempted.

    • Furnisher Duties. With respect to furnishers of information, the FCRA imposes two general requirements: the duty to provide accurate information under § 1681s-2(a) and the duty to investigate the accuracy of reported information upon receiving notice of a dispute under § 1681s-2(b).
    • Furnisher Investigation. To trigger a furnisher’s duty to investigate, however, notice to the furnisher of disputed information must be given by a CRA pursuant to § 1681i(a)(2).  A furnisher has no responsibility to investigate a credit dispute until it receives notice from a CRA.  Notification from a consumer is not enough.
    • Furnisher Duties. Enforcement of the duties enumerated in § 1681s-2(a) is expressly reserved to federal agencies. However, a private cause of action for consumers is recognized under § 1681s-2(b) against furnishers who fail to comply with the requirements of that section. 
    • Furnisher Investigation. An allegation of notice sufficient to state a private cause of action under § 1681s-2(b) has two aspects. First, the consumer must allege he informed the CRA of his dispute. Second, the consumer must allege that the CRA contacted the furnisher, as required by § 1681i(a)(2), and requested that it investigate the credit information it had provided.
    • Preemption. Section 1681t(b)(1)(F) totally preempts all state common law tort claims against furnishers of credit information arising from conduct regulated by § 1681s-2.
    • Preemption. Section 1681h(e) is not a preemption provision. It is a general grant of protection to furnishers for certain disclosures mandated under the FCRA.  Even if there were a conflict between the two sections, the subsequently enacted § 1681t would contro.
    • Preemption. The private cause of action under § 1785.25 of the CCRAA is not preempted by § 1681t of the FCRA.