The Fair Credit Reporting Act (FCRA) imposes responsibilities on
those who "furnish information to consumer reporting
agencies." Where entities that furnish information violate
those responsibilities, the FCRA provides consumers with legal
remedies, but prohibits them from pursuing state law claims
relating to the violations. In a recent opinion, the Seventh
Circuit reaffirmed that the FCRA preempts all state law claims,
both those arising under state statutes, and those arising under
state common law.
In Aleshire v. Harris, N.A., the
plaintiff borrowed several million dollars from the defendant bank.
When the bank reported those loans to consumer credit reporting
agencies, it allegedly reported incorrect loan balances,
double-reported some of the loans and incorrectly reported that the
borrower had exceeded her credit limit. The borrower sued the bank,
pleading claims under the FCRA as well as claims under state common
law. Holding that they were barred by the FCRA's preemption
provision, the district court dismissed the borrower's state
On appeal, the borrower argued that the FCRA only preempts state
law claims arising under state statutes, not claims arising under
the common law. In support of her argument, the borrower pointed to
a section of the FCRA that prohibits consumers from bringing
defamation, invasion of privacy and negligence claims against
entities that furnish false information to credit reporting
agencies unless those entities do so "with malice or willful
intent to injure" the consumer. The borrower reasoned that,
reading the FCRA's preemption provision expansively to bar
common law claims rather than narrowly to bar only statutory claims
would nullify the section that allows consumers to bring
defamation, invasion of privacy and negligence claims under certain
The Seventh Circuit noted that the borrower's argument
"has garnered some sympathy among district courts" in Pennsylvania, Georgia and Texas. However, relying on its previous
holding in Purcell v. Bank of America, in which
the Seventh Circuit concluded that these two provisions of the FCRA
are not inconsistent because one provision simply preempts more
claims than the other, the Court rejected the borrower's
argument and affirmed the dismissal of her state law claims.
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