F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

J O H N S C H L E G E L , on behalf of himself and all others similarly situated; C A R

O L R O B I N S C H L E G E L , on behalf of herself and all others similarly situated,

Plaintiffs-Appellants

,

v

.

W E L L S F A

R G O B A N K , NA, Defendant-Appellee

. N o. 11-16816

D.C. No. 3:10-cv-05679- CRB

OPI NI ON

A ppeal from the United States District Court for the Northern District of California Charles R. B rey er, District J udg e, Presiding

Arg ued and Submitted March 15, 2013—San F rancisco, California

F iled J uly 3, 2013

B efore: J . Clifford W allace and Sandra S. I kuta, Circuit J udg e s, and Marvin J . Garbis, Senior District J udg e. *

Opinion by J udg e I k

uta

* T h e Ho n o rab l e M a r v i n J

. Garb is, Sen io r D istrict J u d g e f o r th e U .S. District Co u

rt f o r th e District o f

Mary l an d , sittin g b y

d esig n atio n

.S C H L E G E L V

. W E L L S F A R G O B A N K 2

SUMMARY * *

F oreclosure

The panel affi r m e d i n part and reversed in part the dismissal of an action seeking re l ief under the F air Debt Collection Practices Act and under the E q u a l Credit Opportunity A ct, which makes it ill e ga l for a creditor to di s c r iminate ag ainst a credit applicant on the basis of race, color, relig ion, national orig in, sex or marital status, or ag e.

The pan e l held that appellants’ complaint d id not plausibly alleg e that a bank that sent mortg ag e default notices despite the ex istence of a loan modification ag reement was a “debt collector” under the F DCPA because the complaint did
not a l leg e that the principal purpose of the bank’s business

w a s d e b t collection, or that the b ank was in the business o f collecting the debts of others. The p anel rejected a per se rule that a creditor cannot meet the definition of a debt collector.

The p anel held that t h e complaint stated a claim under ECOA’s notice requirement, whi c h provides: “Each applicant a g ainst w h o m a dv erse action is taken shall be entitled to a statement of reas o n s for such action from the creditor.” The panel held that the bank’s alleg ed acceleration of appellants’ debt constituted a revocation o f credit a nd thus met the definition of adverse action.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co urt staf

f f o r th e co n v en i en ce o f

th e read er.S C H L E G E L V

. W E L L S F A R G O B A N K 3

COUNSEL

S. Chandler Visher, L aw Offices of S. Chandler Visher, San F r a n c i s co, California; Daniel M. Harris (arg ued) and Anthony P

. Valach, J r., The L aw Offices of Daniel Harris, Chi c a go , I llinois, for Plaintiffs-Appellants.

J an T. Chilton (arg

ued), Ma r k D. L onerg an, and Michael J

. Steiner, Severson & W erson, San F rancisco, Califo r nia, for Defendant-Appellee.

OP INION

I KUTA, Circuit J udg e:

J ohn and Carol Schleg el appeal the dismissa l of their action seeking relief under the F a ir Debt Collection Practices Act (F DCPA), 15 U. S

. C

. §§ 1692–1692p (2006), and the Equal Credit Opportunity Act (ECOA), 15 U .S.C. §§ 1691–1691f (2006). We a ff i rm the district court’s dismissal of the Schl ege ls’ F DCPA c laim, because their complaint did not plausibly alleg e that W e lls F ar go w as a “debt collector” for purposes of the Act. W e r everse, however, the court’s dismissal o f the Schleg els’ claim that W e lls F arg o, in violation of ECOA, failed to g ive them notice within thirty day s after taking an adverse action.

I

I n J anuary 2009, J ohn a

nd Carol Robin Schleg el obtained

a $157,605 loan fro m NT FN, I nc., secured by their L a sS C H L E G E L V

. W E L L S F A R G O B A N K 4

Cruces, New Mex ico home. 1 They subsequently

fell behind

on their mortg ag e p a

y ments, and in M a r ch 2 010, f iled a petition in bankruptcy

. As par t o f t he bankruptcy process, they reaffirmed the loan pursuant to 11 U.S.C. § 524. T h e loan and deed of trust were assig ned to W ells F arg o.

On March 27, 2010, We l l s Fa rg o proposed a loan modification ag r e e ment that r etained the same interest rate but ex tended the maturity d ate of the loan from F ebruary 2039 to April 2050. The bankruptcy court approved the loan modification ag r eement, which b e c a me effective on J uly 1, 2010, with pay

ments to beg in on Aug ust 1
, 2010. The Schleg els r eceived a discharg e in bankruptcy on J uly 9, 2010.

On J uly 19, 2010, W ells F ar go s e n t the Schleg els a default n otice indicating that the Schleg els’ loan was “in d e fault for failure to make pay ments due,” and stating th a t , unless the Schleg els became current on t heir loan pay ments by Aug u st 18, 2010, it would “ b ecome necessary to require immediate pay

ment in full (also called acceleration) of [ their] Mortg ag e Note and p u r sue the remedies provided for in [ their] Mortg ag e or Deed o f Trus t , which include foreclosure.” The Schleg e ls c ontacted W el l s Fa rg o, which “told them not to w o r r y , to sit tig ht and to proceed with the loan modification.” B eg inning Aug u st 1, 2010, the Schleg e ls made the monthly pay

ments r equired u nder the modification
ag reement.

N o t w ithstanding its assurances, W ells F arg o did not correct its r ecords r eg arding the status of the Schleg els’ loan. The Schleg els received a second default notice, dated November 7, 2010, which stated that their mortg ag e was in

1 T h e f o llo w in g f

acts are tak en f

ro m th e Sch l eg els’ am en d ed co m p lain t.S C H L E G E L V

. W E L L S F A R G O B A N K 5

default a nd that, unl e ss they paid the amount due b y December 7, 2010, W ells F arg o would proceed with

a c celeration of the loan a nd possibly commence foreclos u r e proceeding s. When the Schleg els ag ain called Wells F arg o

on November 13 reg arding this notice, W ells F arg o told them that no modification ag reement was in effect and tha t t h e y

were in default under their loan. Wells F arg o then s e n t a third default notice, dated N ovember 14, 2010, stating that the Schleg els were in default and that it would “b e c o me necessary

. . . to accelerate the Mortg ag e Note and pursue the remedies ag ainst the property” unless the past due pay ments were made by

December 14, 2010.

On D ecember 3, 2 010, the Schleg els sent a letter to W ells F arg o asking it to ex plain its failure to acknowledg e the loan modification. When Wells F argo did not respond, the Schleg els filed this lawsuit on December 14, 2010, requesting relief under the F DCPA and ECOA.

Despite the Schleg els’ complaint, W ells F arg o sent y et another default notice, dated D ecember 2 0, this time formally accelerating the loan. The n otic e s t a ted: “You are hereby

n o tified that, due to the default under the terms o f t h e mortg ag e or deed of trust, the entire balance is due a nd
pay able.” I t also stated that the “loan file ha[ d] been referred to” the bank’s “attorney with instructions to beg in f oreclosure proceeding s.” Two d ay s later, on December 22, W ells F a r go’s attorney s sent the Schleg els a fifth default notice, threatening to commence foreclosure proceeding s unless full
pay ment was made by J anuary 24, 2011. Only after this f ifth default notice did W e lls F a r g o eventually acknowledg e that the J u ly 2010 modification ag r eement was in effect and that the default notices sent to the Schleg els were incorrect.S C H L E G E L V

. W E L L S F A R G O B A N K 6

According to the Schl e gels, this sequence of default notices f rom W ells F arg o “caused the Schleg els mental
ang uish,” including worsening the effects of J ohn Schleg e l’s post-traumatic stress disorder.

The district court dismissed the Schleg e ls’ complaint for failure to state a claim, and the Schleg els tim e ly appealed. W e have jurisdiction under 28 U.S.C. § 1291.

II

W e revi e w d e novo the district court’s order dismissing the Schleg els’ complaint for failure to state a claim upon which r elief can be g ranted. Brantley v. NBC Universal, Inc.
, 675 F .3d 1192, 1197 (9th Cir. 2012). I n so doing

, we accept

as true a ll “well-pleaded factual alleg ations” in the complaint, which we construe “in the lig ht m ost favorable” to the
p l a i n t i ff s. Autotel v. Nev. Bell Tel. Co.
, 697 F .3d 846, 850 (9th Cir. 2 012). I n order to survive a motion to dismiss, the Schleg els’ complaint had to alleg e “sufficient factual matter, accepted a s true, to state a claim to relief that is plausible on it s f ac e

. ” Ashcroft v. Iqbal

, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “ A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the r eas o n able inference that the defendant is liable for the misconduct alleg ed.” Id.

The Schleg els’ c omplaint raises two claims, one under the F DCPA and the other u nder E COA. W e address each claim in turn.S C H L E G E L V

. W E L L S F A R G O B A N K 7

A

Cong r ess passed the F DCPA i n 1 9 77 with the stated
pu r poses of e liminating “ abusive debt collection practices,” ensuring “ that those debt c o l lectors who refrain from using abusive debt collection practice s are not competitively disadvantag e d,” and promot ing “consistent State action to protect consumers ag a inst debt collection abuses.” 15 U .S.C. § 1692(e). I n furtherance of these p urposes, the F DCPA bans

a variety of debt collection p ractices a nd allows indivi d u a l s to sue offending

debt collectors.

T h e Schleg els’ complaint alleg es that W ells F arg o violated two of the F DCPA’s provisions. The first, 15 U .S.C. § 1692e, provides that a “d e b t c o llector may n ot use any false, deceptive, or misleading representa t i o n o r means in connection w ith the collection of an y d ebt.” The second, 15 U.S.C. § 1 692f, provides that a “ d ebt collector may not

use unfair or unconscionable means to coll e c t or a ttempt to collect any debt.” B e cause these prohibit i o n s a p p ly only to “debt collector[ s] ” as d efined by the FD C P A, the complaint must plead “factual content that allows the court to draw the reasonable inference” that W ells F arg o is a debt collector. Iqbal

, 5 56 U.S. at 678; see also D ougherty v. City of Covina
, 654 F .3d 892, 900–01 (9th Cir. 20 1 1 ) (citing Bell Atlantic Corp. v. Twombly 550 U.S. 544, 570 (2006)). 2

2 W ells F arg o arg u es th at i t qu alif ies as a cred i to r un der § 1 6 9 2 a(4 ), an d th eref o re can n o t be a d eb t co llecto r. S ee 15 U.S.C. § 1 6 9 2 a(4 ) (ex clu d in g f ro m t h e d ef in itio n o f “ cred ito r” “ an y p erso n t o t h e ex t en t th at h e receiv es

an assig n m en t o r tran s fe r o f a d eb t in d ef au lt s o lely f

o r th e p u rp o se of f acilitatin g co llectio n o f su ch d eb t f o r an o th er”). In m ak i n g th is arg u m en t, W ells F arg o relies on o u t- o f

- circu it d ecisio n s h o ld in g th at a perso n w h o

m eets th e FDCP A d ef

in itio n o f “ cred ito r” is p er se n o t a “ d eb t co l lecto r.” S ee, e.g

. , McKin n ey v. Ca dlewa y Pro p s ., In c. , 5 4 8 F.3 d 4 9 6, 4 9 8 (7 th Cir.S C H L E G E L V

. W E L L S F A R G O B A N K 8

The F DCPA defines t he p hrase “debt collector” to include: (1) “ any person who u ses any instru m e n tality o f interstate commerce or the mails in any business the principal
purpose of w hich is the c ollection of any debts,” and (2) any person “who reg ularly c ollects or attempts to collect, directly

or indirectly

, debts owed or due or asserted to be owed o r d ue another.” 15 U. S

. C

. § 1692a(6). 3 On appeal, the Schleg e ls
arg ue that W ells F a

rg o meets both definitions.

2 0 0 8 ) (“ T h e FDCP A co v ers d eb t c o llecto rs, n o t cred ito rs, an d th ese categ o ries are m

u tu ally ex clu siv e.” (in tern al qu o tat i o n m ark s om itted )); Brid g e v. Ocwen Fed

. Ba nk, FS B
, 6 8 1 F.3 d 3 5 5
, 3 5 9 (6 th Cir. 2 0 1 2 ). W e rej ect th is p er se ru le, w

h ich f in d s n o su

p p o rt in th e tex t o f t h e FDCP A
, b u t n ev erth eless co n clu d e on oth er g ro un d s th at W ells Farg o d o es n o t

m eet th e statuto ry

d ef in itio n o f d eb t co l lecto r.

3 1 5 U.S.C. § 1 69 2 a(6 ) states, in relev an t p art:

T h e term “ d eb t co llecto r” m ean s an y p erso n w h o u ses

an y in stru m en tality o f in terstate co m m erce o r th e m ails in an y b u sin ess th e p rin cip al p urp o s e o f w h ich is th e

co l lectio n of an y deb ts, o r w h o reg u lar l y c o l lects or attem p ts to co llect, d i rectly o r in d irectly

, d eb ts o w ed or d u e or asserte d t o b e o w ed o r d u e an o th er. No tw ith s tan d in g th e ex clu sio n p ro v id ed b y clau se (F)

o f th e last sen ten ce o f th is p arag rap h

, th e term in clu des

an y cred ito r w h o , in th e p ro cess o f co l lectin g h is o w n d eb ts, u ses an y n am e oth er th an h is o w n w h i ch w ou ld in d icate th at a th ird p erso n is co llectin g o r attem p tin g to

co l lect su ch d eb ts. Fo r t

h e p urp o se o f sectio n 1 6 9 2 f (6 )

o f t h is t itle, su ch term also in clu d es an y p erso n w h o

u ses an y in stru m en tality o f i n terstate co m m erce o r th e

m ails in an y b u sin ess th e p rin cip al p urp o se o f w h ich is th e en f o rcem en t o f

secu rity in terests.

1 5 U.S.C. § 16 9 2 a. T h e d ef in itio n ex p ressly ex clu d es six ty

p es o f p erso n s

o r o rg an i zatio n s f

ro m t h e d ef

in i tio n o f “ d eb t co llecto r.” § 1 69 2 a(6 ) (A )– (F). No n e o f

th ese su bsectio n s is relev an t to th is case.S C H L E G E L V

. W E L L S F A R G O B A N K 9

1

According to the Schleg els

, t h e amended complaint sufficiently alleg es that W ells F arg o meets the f irst definition

o f “ debt collector” b y stating that “W ells F a rg o is i n t h e business of collecting debts and u ses instrumentalities o f interstate commerce in that business.” The Schleg els concede that the complaint does not ex pressly state that the “principal purpose” of W ells F arg o’s bu s i n ess is debt collection, a s required by the firs t d e f

i n ition in § 1 692a(6), but arg ue that the complaint “ i n v o ked” this concept. W e disag ree. The complaint fails to provide any factual basis from which we could plausibly infer that the p r i n c i pal purpose of W ells F arg o’s business is debt col l e ct i o n. Rather, the complaint’s factual matter, viewed in the lig h t most favorable to the Schleg els, establishes only that debt collection is some part o f W e lls F arg o’s business, which is insufficient to state a claim under the F D CPA. See Dougherty , 654 F .3d at 900–01.

At o ral arg ument, the Schleg els raised a different
arg ument in support of the propositio n t h a t W ells F arg o fits within the first definition of “ debt collector.” Noting that this definition requires debt c o llection to be the “prin c i p al purpose” of “a n y business,” they arg ue that the word “business” d oes n ot mean “company ,” but rather any activity of a company

. Thus, t h e S c hleg els contend, the q uestion is
not whether W ells F arg o ’s principal b usiness is the collection of debts, but whether W ells F arg o is eng ag ed in any activity which has the principal purpose of collecting debts.

W e reject this arg ument b ecause it is not supported by the statutory tex t. T he Schleg e ls’ proposed definition would

ex p and the term “debt col l e ctor” to include any person w ho collects a debt in the course of doing business, because suchS C H L E G E L V

. W E L L S F A R G O B A N K 10

a person would be eng ag ed in the endeavor of debt collection. Such a n ex pansive reading would rend er superfluous the second definition of “debt coll e c t o r ,” which includes those “who reg ularly collect[ ] or attempt[ ] to collect

, d i r e c t ly o r indirectly

, debts owed or d ue or asserted to be owed or d ue another.” § 1692a(6). B ecause interpretations that c reate superfluity are to be avoided, Hearn v. W

. Conf. of Teamsters Pension Tr. Fund

, 68 F .3 d 3 0 1
, 3 04 (9th Cir. 1995), we decline to adopt the Schleg els’ strained understanding of the word “business” in § 1692a(6).

2

The Schleg els nex t arg ue that their complaint adequately alleg ed that W ells F arg o meets the second definition of debt collector, w hich as n oted a b o v e i ncludes any person w ho “reg u larly collects or attempts to c ollect, directly o r indirectly

, debts owed or due or asserted to b e owed or d ue another.” § 1692a(6). They contend that W ells F arg o fits this definition because it is in the b usiness of collecting not only the debts it orig inated, but also debts that were orig inated b y others. I n this case, for ex ampl e , t he Schleg els’ debt was orig ina l l y owed to NTF N, I nc. before it was assig ned to W e lls F arg o.

This arg umen t f

a ils, b ecause it would require u s to overlook the word “another” in the second definition of “debt collector.” The complaint makes no factual alleg ations from which we could plausibly infer that W ells F arg o r e gu l a rly collects debts owed to someone other than W ells F arg o. B ecause NTF N, I nc. assig ned the Schleg els’ loan and deed o f
trust to W e l l s F arg o, W ells F arg o’s collection efforts in this

case relate only t o d e bts o wed to itself. The statute is notS C H L E G E L V

. W E L L S F A R G O B A N K 11

susceptible to the Schleg e ls’ interpretation that “owed or d ue another” means “orig inally owed or due another.”

F or this reason, we reject the Schleg els’ arg ument that the following lang uag e in the c omplaint a dequately alleg e s that W e lls F arg o collects debts “owed or due another”:

W e lls F arg o is in the business of collecti ng d ebts and uses instrumentalities of interstat e

commerce i n t h at business. See Oppong v

. First Union Mortg. Corp.
, 2 15 F ed.Appx

. 114 (3d Cir. 2007) (“the District Court was correct to conclu d e that W ells F arg o is a debt collector under the F D CPA” . . . “in a ty p ical eigh t een month period, it appears that W ells F arg o acquires 534 mortg ag e s in default”).

The quoted lang uag e itself does not alleg e that W ells F arg o collects the debts of another. Even if the cited opinion were fully incorporated into the c omplaint, it would not r ectify this omission, because Oppong fails to differ e n t i a t e b e tween debts “owed to another” a

n d debts orig inal l y o w ed to another but

now o w ed to W ells F arg o. See, e.g. , Oppong
, 2 15 F

. App’x

. at 119 (rely

ing on evidence that W ells F arg o acquired a larg e number o f d efaulted mortg ag es and a t t em pted to collect the debts a s s u p port for its conclusion that Wells F arg o collects debts owed to another).

B e cause the Schleg e ls’ complaint does not plausibly alleg e that W ells F a

rg o is a debt collector under § 1692a(6),S C H L E G E L V

. W E L L S F A R G O B A N K 12

w e a ffirm the district court’s d ismissal of the Schleg e ls ’ F DCPA claim. 4

B

The Schleg els’ complaint also raises a claim under ECOA, w hich makes it illeg al “for any credito r to discriminate ag ainst any applicant, with r espect to any aspect of a credit transaction

. . . on the b asis of race, color, relig ion, national o ri g in, sex or marital status, or ag e.” 15 U .S.C. § 1691(a)(1). One way that EC O A effectuates this g oal is throug h its notice requirement, which states: “Each applicant

a gainst whom adverse action is taken shall be entitled to a statement of r easons for suc h a ct i o n from the creditor.” Id

. § 1691(d)(2). ECOA defines an “adverse action” as a:

denial or revocation of credit, a c hang e in the
terms o f a n ex isting credit arrang ement, or a refusal to g r ant credit i n substantially the
amount or on substantially the terms requested. Such term does not incl ude a refusal to e x ten d additional credit under an

ex isting c redi t arrang ement where the

4 In p assin g , th e Sch leg els su g g est th at th e d istrict co u rt sh ou ld n o t h av e d ism issed w ith ou t leav e to am en d

. T h ey m ak e n o arg u m en t in su p p o rt of th is assertio n , h o w ev er, an d w e th eref o re d o n o t

ad d ress it h ere. Fed . R. A p p. P

. 2 8(a)(5 ), (8 ), (9 ); Ko hler v. In ter-Tel Tech s. , 2 4 4 F.3 d 1 1 6 7
, 1 1 8 2 (9 th Cir. 2 0 0 1 ) (“ I s s ue s raised in a brief w h ich are n o t s u

p p o rted b y arg u m en t are d eem ed

ab an d o n ed .”).S C H L E G E L V

. W E L L S F A R G O B A N K 13

applicant is d elinquent o r otherwise in default,

or where such additional credit would ex c eed a previously

established credit limit.

Id . § 1691(d)(6).

W h en a c reditor takes an adverse action ag ainst an applicant withou t giving the required n otice, the applicant
may sue for a violation of ECOA. I d

. § 1691e (“Any creditor who fails to comply with a n y requirement imposed under this subchapter shall be liable to the ag g rieved appli ca n t f or any

a c t ual d amag es sustained by such applicant”); see al s o Thompson v. Galles Chevrolet Co.

, 807 F .2d 163, 166 (10th Cir. 1986) (quoting Sayers v. Gen. Motors Acceptance Corp.
, 522 F . Supp. 835, 840 (W

. D. Mo. 1981)).

The Schleg els contend that W e lls F arg o’s acceleration of their debt constituted a “revocation of credit” for purposes o f the definition of “adverse a ction.” ECOA defines “credit” to

mean “the rig ht g ranted by a creditor t o a debtor to defer
pay ment of d ebt or to incur debts and d efer its pay ment or to purchase property or services and d e f e r pay ment therefor.” 15 U.S.C. § 1691a(d). ECOA does not define “revocation,” and so we read it as having its plain meaning : “The action o f

r e v o king

, rescinding

, or annulling ; withdrawal.” Ox ford Eng lish D ict i o nary 838 (2d ed. 1 989); see also id

. (defining “revoke ” as “[ t] o annul, repeal, r escind, cancel”); MerriamW e b ste r ’s Colleg iate Dictionary 1068 (11th ed. 2 005) (defining “revoke” to mean: “to annul by recalling or taking back”). Thus, a lender r evokes credit when it annuls, repeals, rescinds or cancels a rig

h t to defer pay

ment of a debt.

Here, the Schleg els’ c o m p laint plausibly alleg es that W e lls F arg o a

nnulled, repealed, rescinded, or c anceled theirS C H L E G E L V

. W E L L S F A R G O B A N K 14

rig ht to defer repay

ment of their loan. Parag raph 25 of their complaint alleg es that, on December 2 0, 2010, the Schleg e ls received a notice from the bank informing them that, “due to the default under the terms of the mo r t ga ge or deed o f trust, the entire balance is due and pay a ble.” The complain t ’s alleg ations establish that the Schleg els made dilig ent efforts
to determine whether W ells F arg o’s de f a u lt n otices were

mere clerical errors or represented W ells F arg o’s termination of the loan modification ag reement. B ased on W ells F arg o’s prolong ed non-responsiveness, and its affirmative statements reg arding loan acceleration and default, the fa cts alleg ed plausibly g ive rise to t h e claim that W ells F arg o terminated the loan mod i f

i cation ag reement and thereby revoked the Schleg els’ credit for purposes of § 1691(d)(6).

W e lls F arg o arg ues that its default notice s to the Schleg els did not constitute adve r s e a ctions because the default notices had no binding effect and did not modify the
t e rms of the Schleg els’ loan or the loan modification
ag reement. W e disag ree. I n essence, W ells F arg o is arg uing that because its default notices violated the loan modification
ag reement, they could not consti t u t e a revocation of credit. B ut neither the tex t of § 1 6 91 nor its implementing
reg ulations sug g est that a “revocation of credit” must b e valid and enforceable in order to constitute an ad v erse action. W h en Wells Fa r go informed the Schleg els that it h ad accelerated their loan and was commencing f oreclosure proceeding s, its statements communicated the bank’s r efusal
to abide by the terms of the loan modification agr e ement, which had g iven the Schleg e l s a l ong er period to repay the loan. On its face, this communication revoked the prior credit
arrang ement.S C H L E G E L V

. W E L L S F A R G O B A N K 15

W h ile sending a mistaken default notice w o u l d not necessarily constitute an adverse action, th e Schleg e ls’

c o mplaint describes eg reg ious c onduct that g oes far b ey o n d clerical error. I n f

ac t , d espite the Schleg els’ repeated i nquiries, Wells F a

rg o did not inform the Schleg e ls that i t s

a c c e l eration of their loan was a mistake u ntil after the Schleg els filed a complaint. W hile W ells F arg o n o w c laims that its a c c eleration of the loan was a n unintentional error, and that the prior loan modi f i cation ag reement remains in effect, such assertions do not e r a s e its prior revocation o f credit for purposes of ECOA.

B e cause the p arties ag r ee that W ells F arg o did not send the Schleg e ls an a d v e r se a ction notice, the complaint’s alleg ations that W ells F arg o took a n adverse action wi t h out comply ing w ith ECOA’s notice requirements are enoug h for the ECOA c laim to survive a motion to dismiss. According ly

, we reverse the d istrict court’s dismissal of their ECOA claim and remand for proceeding s consistent with this opinion. Each party will bear its own costs on appeal.

AF F IRMED IN P ART, R EVE R SED IN P ART a nd REMANDED.