Michelle Bourdelais brought a defamation claim in the Richmond Division of the Eastern District of Virginia against Chase Bank and Chase Home Finance, based on Chase’s alleged reporting of inaccurate information about the status of her mortgage payments to consumer reporting agencies. Chase moved to dismiss the claim, arguing that it was preempted by the Fair Credit Reporting Act. Judge Henry E. Hudson denied the motion, allowing the claim to proceed.
The Fair Credit Reporting Act (“FCRA”) contains two seemingly conflicting sections. Section 1681t(b)(1)(F) appears to preempt all state laws regarding the liability of credit reporting agencies, whereas § 1681h(e) preempts only certain types of common law actions and then only under certain circumstances. The court noted that although the Fourth Circuit has not addressed the issue, seven of nine district courts in the Fourth Circuit have reconciled this conflict by using the “statutory approach” and holding that §1681t(b)(1)(F) only applies to state statutory claims and § 1681h(e) only addresses state common law claims.
Bourdelais argued that the preemption provisions did not apply at all because Chase did not act as a furnisher of information to consumer reporting agencies and Kroll Factual Data, the party who provided Bourdelais’ credit report, was not a consumer reporting agency (“CRA”) within the meaning of the FCRA. The court rejected this argument and noted that the FCRA definitions of “furnisher” and “consumer reporting agency” clearly include Chase and Kroll.
The court then examined whether the preemption provisions of the FCRA barred Bourdelais’ defamation claim. Applying the statutory approach, the court found that since Bourdelais did not assert a state statutory claim, § 1681t(b)(1)(F) did not apply. Section 1681h(e) applies to common law claims arising from disclosures pursuant to section 1681g, 1681h, 1681m or disclosures “by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based…on the report…” 15 U.S.C. § 1681h(e). Bourdelais made a common law claim, but the court held that the disclosed information did not fall into any of the categories triggering preemption. Section 1681g and 1681h apply only to disclosures made by CRAs, and section 1681m applies only to users of consumer reports. Since Chase was neither a CRA nor a user of Bourdelais’ consumer report, these sections did not apply. Additionally, Chase did not use Bourdelais’ consumer report nor did it take adverse action against Bourdelais based on her report. Accordingly, the court held that neither preemption provision applied.