FACTA Preemption and Stronger State Credit Laws
FACTA (2003) amended the FCRA and preempted many state laws on credit reporting and identity theft, but the FCRA does not preempt stronger state laws on employment credit checks. California's ICRAA and laws in ten other states restrict the use of credit information in employment.
How this supports CIPP/US study
Use this lesson to identify the disclosure, workplace or cross-border rule that changes the result in a fact pattern. Continue with the CIPP/US study plan.
In 2003, FACTA amended the FCRA, preempting a range of state laws on credit reporting and identity theft. Importantly, the FCRA does not preempt states from creating stronger laws on employment credit-history checks, and FACTA expressly left some state laws in effect.
Under California's ICRAA, employers must notify applicants/employees of intent to obtain a consumer report and get written authorization first. The form must let the person check a box to receive a copy of any report. To take adverse action, the employer must give the report regardless of any waiver - an exception not applying to those suspected of wrongdoing.
Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington limit the use of credit information to what relates to the position. Most require a substantial relationship; Hawaii requires the credit history to directly relate to an occupational qualification.
Key terms - quick answers
What is “FACTA”?
What is “ICRAA”?
Sources and study method
This independent lesson uses active recall, spaced retrieval and scenario practice. Read the full study method.