The Consumer Data Industry Association (CDIA), the world’s largest trade association whose members include consumer reporting agencies operating in the United States and throughout the world, has filed a lawsuit against the New Jersey Attorney General seeking an injunction to block enforcement of revisions to New Jersey law that require nationwide consumer reporting agencies (NCRAs) to make credit reports available to consumers in multiple languages other than English.

The federal Fair Credit Reporting Act requires CRAs, upon a consumer’s request, to disclose all information “in the consumer’s file” and provide a free copy of the consumer’s credit report without charge if the consumer’s file contains a fraud alert. The federal FCRA also requires NCRAs, upon a consumer’s request, to provide a free copy of the consumer’s credit report annually.

New Jersey, effective as of October 17, amended the state’s Fair Credit Reporting Act to require NCRAs to make credit file information requested by a consumer available to the consumer, upon request, in Spanish “or any other language that the Director of the Division of Consumer Affairs determines is the first language of a significant number of consumers in the State….The director shall require that the information is made available in at least the 10 languages other than English and Spanish that are most frequently spoken as a first language by consumers in this State.”  NCRAs must “provide notice, in any language as determined by the director, on its Internet website in a clear and conspicuous location, of the availability of information subject to disclosure pursuant to this section in languages other than English.”  (We are not aware of any other states that have a similar requirement.)

Filed in New Jersey federal district court, CDIA’s complaint alleges that the NJ requirement to make credit file disclosures available in multiple languages is preempted by federal law and violates the First Amendment of the U.S. Constitution.

With regard to preemption, CDIA alleges that the requirement is preempted by the federal FCRA as follows:

  • as a matter of “conduct preemption” because the requirement, by regulating the manner in which NCRAs provide file disclosures to NJ consumers, interferes with NCRAs’ conduct “with regard to the fulfillment of annual file disclosure requests and NCRAs’ conduct with regard to providing file disclosures following fraud alerts”
  • as a matter of “conflict preemption” because the requirement to disclose the information in a consumer’s credit file in a language other than English “necessarily means that a [NCRA] will not provide the consumer with a disclosure of the information actually found “in the consumer’s file” under the [federal] FCRA, but rather a translation and/or interpretation of it.  Accordingly, CDIA’s members cannot comply [with NJ law] without violating [the federal FCRA].”

With regard to the First Amendment, CDIA alleges that the NJ requirement is an unconstitutional restriction of commercial speech because it represents compelled speech and regulates speech “in a manner that is far more expansive than necessary to serve any governmental interest underlying its enactment.”  According to CDIA, the law “does not merely require CDIA’s members to simply provide static summary or notice of the type of information that is provided in a typical file disclosure; rather, it requires disclosure of dynamic data in at least eleven additional languages, with the result that every item of information in English for every single disclosure will have to be translated in real time (or the companies would have to begin maintaining all of their tradeline data in a variety of languages; an effort that is not realistic).”