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FCRA is constitutional

November 9, 2012

As someone who defends consumer reporting agencies for (some of) a living, I must confess that it had never even occurred to me to wonder whether the FCRA, which regulates the information that CRAs provide to businesses about consumers, is constitutional.  But another defense lawyer recently asked the question by arguing that the FCRA is unconstitutional:  the argument was that a CRA’s statements to its business clients are private commercial speech, and that governmental regulation of such private speech is subject to “strict scrutiny.”  As a result, the regulation will be found unconstitutional unless it is narrowly tailored and attempts to achieve a “compelling” government interest.

The Eastern District of Pennsylvania recently rejected this argument and found that the FCRA is in fact constitutional.  The court held that the kind of private speech at issue here gets “intermediate scrutiny,” not strict scrutiny, and that the FCRA meets the intermediate scrutiny test:  it directly advances a governmental interest without placing excessive restrictions on free speech.  The court found that the FCRA does both these things:  it balances the government’s interest in protecting consumer privacy while at the same time giving business a right to provide consumer reports to businesses.

It’s possible but unlikely that this ruling will get appealed.  For now, though, the FCRA appears to have survived its first-known (to me, anyway) constitutional challenge.

Categories: Uncategorized
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