FACTA Preemption: New Restraints on States' Actions

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David A. Szwak
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Joined: Tue Jul 26, 2005 4:15 am

FACTA Preemption: New Restraints on States' Actions

Post by David A. Szwak »

[u93][b93]New restraints on states’ actions[/b93][/u93].

FACTA amends the FCRA’s administrative enforcement section to provide that in the case of a violation of furnishers’ obligations to provide accurate information or to comply with to-be-issued guidelines to protect the accuracy and integrity of consumer information, or of financial institutions’ obligations to comply with the to-be-issued red flag guidelines for detecting identity theft, a state may not simply bring an action for damages on behalf of its residents. Rather, the state must first obtain an injunction against the violator that prohibits the violator from violating the FCRA, and then the state may only seek damages for violations that occur after the injunction. Given that the FCRA preempts state regulation of these obligations and eliminates the right of consumers’ to enforce them, violators have little to fear from flouting them.
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Return to “FCRA Statute And Amendments: 15 U.S.C. 1681, et. seq.”