Opinion ID: 6220839
Heading Depth: 2
Heading Rank: 4

Heading: Areas of Regulation

Text: Having identified the domain of preemption under Section 1681t(b)(1)(E), we look into the statutory provisions that define its scope, for those separate what Congress preempted from what it did not preempt. In this endeavor, we zero in on Sections 1681c (a)(1)-(5), 1681c(b), 1681c(a)(7) and 1681c(a)(8). exit the lending industry altogether; State regulations may inhibit the assembly of comprehensive credit reports, undermining their predictive value and increasing lending risk; and individual state regulation would frustrate consumers as they move, commute, and deal with business from across state lines, all of which would reduce lending competition across the country, driving up interest rates for some consumers, and foreclosing access to credit for others. -20-
To begin, pursuant to Section 1681c(a), no consumer reporting agency may make any consumer report containing any of the following items of information:
Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.
records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.
payment, antedate the report by more than seven years.
charged to profit and loss which antedate the report by more than seven years.
other than records of convictions of crimes which antedates the report by more than seven years.5 See 15 U.S.C. § 1681c(a)(1)-(5). The list covers information to be excluded from credit reports, in a progression that moves from 5 We note that there is a simple scrivener's error in Section 1681c(a)(5). Moran v. Screening Pros., LLC, 943 F.3d 1175, 1183 n.6 (9th Cir. 2019). Thus, a comma should be included to separate the exclusionary clause as follows, Any other adverse item of information, other than records of convictions of crimes [,] which antedates the report by more than seven years. Id. -21- bankruptcy cases (Section 1681c(a)(1)), to civil suits, judgments and arrests (Section 1681c(a)(2)), paid tax liens (Section 1681c(a)(3)), and accounts placed for collection (Section 1681c(a)(4)). Fairly read, all of these categories comprise adverse items of information, and immediately precede Section 1681c(a)(5), which adds to the category of material to be excluded from reports, [a]ny other adverse item of information, other than records of conviction of crimes[,] which antedates the report by more than seven years. Id. § 1681c(a)(5). The catch-all language is broad enough to cover medical debt and debt resulting from domestic abuse, which consist of adverse items of information not covered by the immediately preceding provisions. See FTC Staff Report, supra at 57 (Section 1681c(a)(5) applies to all adverse information that is not covered by Sections 1681c (a)(1)-(4)).6 6As originally legislated as part of the FCRA in 1970, Section 1681c (a)(5) was enacted as Section 1681c(a)(6). See Moran, 943 F. 3d at 1182 (describing original enactment). In 1990, the Federal Trade Commission (FTC), the agency with original interpretative authority over the FCRA, released a report providing guidance on the statute. See Fed. Trade Comm'n, Commentary on the Fair Credit Reporting Act, 55 Fed. Reg. 18,804 (May 4, 1990) (FTC Staff Commentary). The Commentary states that the catch-all provision applied to all adverse information that is not covered by Section 1681c(a)(1)-(5). Id. at 18,818. In 1998, Congress amended the FCRA, including Section 1681c(a)(6). As a result, the catch-all provision became Section 1681c(a)(5). See Moran, 943 F.3d at 1183 (noting change). In 2011, as primary interpretative authority was being handed over from the FTC to the Consumer Financial Protection Bureau, the FTC issued a staff report -22- Measuring the reach of preemption, Section 1681c(a)(5) points to age. Subject to three exceptions found in Section 1681c(b), it prohibits consumer reporting agencies from reporting adverse information that is more than seven years old. 7 Correspondingly, agencies may report that information, provided it does not predate the report for more than seven years. Id. But they are not required to do so. See FTC Staff Report, supra at 55 (Section 1681c(a)(5) does not require consumer reporting agencies to report all adverse information within the time period[] set forth, but only prohibits them from reporting adverse items beyond [that] time period[]). In drafting (a)(1)-(a)(5) of Section 1681c, Congress defined the subject matter, the kinds and uses of information, it was regulating narrowly and with specificity: information older than seven years relating to bankruptcies, civil suits, civil judgments, records of arrest, paid tax liens, accounts in collection, or that is otherwise adverse. withdrawing the 1990 Commentary. See FTC Staff Report, supra at 8. As noted in the text, for Section 1681c(a)(5) the Staff Report maintained the position the Commentary had adopted in 1990 in connection with then Section 1681c(a)(6). Id. at 57. 7See De Armond, supra at 408 ([T]he FCRA provision is less about the substantive character of the information and much more about its age. The provision establishes that information is sufficiently 'fresh' only for the designated period of time, without governing the content itself.). -23- On appeal to us, CDIA has not developed any argument as to whether and how the Amendments might trench on this more circumscribed subject matter -- i.e., the items of information listed in Section 1681c(a). Thus, given the arguments made to us, we vacate the District Court judgment finding that Section 1681t(b)(1)(E) preempts the Maine Amendments in their entirety, and remand to the District Court for further proceedings consistent with this opinion.8
CDIA posits that the Medical Debt Reporting Act is preempted because it regulates the same subject matter as Sections 1681c(a)(7) and 1681c(a)(8). These sections regulate the reporting of veterans' medical debt. To CDIA's way of thinking, because regulation of veterans' medical debt is regulation of 8CDIA has not developed on appeal any argument that Section 1681c preempts the Amendments based on a theory of implied preemption (of either the field, obstacle, or impossibility variety). See Murphy, 138 S. Ct. at 1480 (describing different theories of implied preemption). Any such argument is therefore waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ([I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.). We focus, as did the District Court, on whether Section 1681t(b) expressly preempts the Amendments. See Consumer Data Indus. Ass'n, 495 F. Supp. 3d at 19-20 (Plaintiff's chief argument is that the two Maine Amendments are expressly preempted . . . . the Maine Amendments intrude upon a subject matter that Congress has recently sought to expressly preempt from state regulation.). -24- medical debt, it is preempted by the FCRA. But that these sections carry special rules when it comes to veterans' medical debt as regulated in the statute, does not mean that they more broadly regulate the subject matter of medical debt reporting, given that medical debt afflicting veterans is not the only type of medical debt Congress could have regulated. Consider medical debt besetting law enforcement officers, firefighters, health-care workers, education workers, construction workers, manufacturing workers, transportation workers, retail-sale workers, public employees, individuals in other labor markets, as well as that burdening independent contractors, retirees and a myriad of persons found in other sectors of the U.S. economy. If Congress had intended to regulate the reporting of all those instances of medical debt it could simply have said so, without textually limiting the field of regulation to veterans' medical debt. And that is not what it did.9 In consequence, we conclude that Sections 1681c(a)(7) and In 2013, Senator Merkley and others presented an amendment 9 to Section 1681c(a) to delete from credit reports [a]ny information related to a fully paid or settled medical debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedate[d] the report by more than 45 days. See Medical Debt Responsibility Act of 2013, S. 160, 113th Cong. (2013). Similarly, in 2018 Senator Merkley proposed an amendment to Section 1681c(a) to exclude from consumer reports [a]ny information related to a medical debt if the date on which such debt was placed for collection, charged to profit or loss, or subjected to any similar action antedate[d] the -25- 1681c(a)(8) only regulate the reporting of veterans' medical debt, not medical debt in general. Although it is clear to us that Sections 1681c(a)(7) and 1681c(a)(8) have no preemptive effect for non-veterans' medical debt, the scope of their partial preemptive effect on the Maine Medical Debt Reporting Act as it applies to veterans' medical debt is less obvious. Because the parties have not heretofore briefed in any detail the issue of the partial preemptive scope and effect of Sections 1681c(a)(7) and 1681c(a)(8) on the Maine Medical Reporting Act, we think it best to permit the parties to develop those arguments in the District Court. We take no view of the extent of partial preemption of the Medical Debt Reporting Act at this time. Consequently, we vacate the District Court judgment, reverse the holding that regulation of non-veteran medical debt report by less than 180 days, and [a]ny information related to a fully paid medical debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedate[d] the report by more than 45 days. See 164 Cong. Rec. S 1482 (March 7, 2018). As the District Court observed, neither bill made it out of committee. By way of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, Congress did amend the FCRA to create protections for veterans in the reporting of certain medical collection debts, to rectify problematic reporting of medical debt included in a consumer report of a veteran due to inappropriate or delayed payment for hospital care, medical services, or extended care services provided in a non-Department of Veterans Affairs facility under the laws administered by the Secretary of Veterans Affairs, and to clarify the process of debt collection of such medical debt. Id. § 302, 132 Stat. at 1332. -26- reporting is preempted, and remand for further proceedings addressing the partial preemptive effect of Sections 1681c(a)(7) and 1681c(a)(8) on the Maine Medical Debt Reporting Act.