## F I L E D United States Court of Appeals Tenth Circuit 

### MAR 9 1999 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

LORNA A. MATTHIESEN, an individual,

Plaintiff-Appellant,

v. BANC ONE MORTGAGE CORPORATION, a Delaware Corporation, Defendant-Appellee. No. 98-6069

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

(D.C. No. 97-CV-351)

Submitted on the briefs: Andrew W. Lester, Shannon F. Davies, Lester, Loving & Davies, P.C., Edmond, Oklahoma, for Plaintiff-Appellant. Cheryl P. Hunter, Janis W. Preslar, Hall, Estill, H ardwick, Gable, Golden & Nelson, Oklahoma City, Oklahoma, Steven Alan Bennett, General Counsel, Matthew M. Julius, National Litigation Counsel, Ban c One Corporation, Dallas, Texas, for Defendant-Appellee.

Before TACHA , BARRETT , and MURPHY , Circuit Judges.1 After examining the briefs and appellate record, th is panel has

determined unanimously that oral argument would notmaterially assist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without ora l argument. -2- TACHA , Circuit Judge.

Plaintiff-appellant Lorna Matthiesen appeals from the grant of summary judgment by the district court to defendant Bank On e Mortgage Corporation (BOMC) on her claims of gender discrimination in a loan application, in violation of the Equal Credit Opportunity Act, 15 U.S.C. § 16 91(a) (ECOA), and failure to disclose the sources relied upon to deny her loan application, in violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681(m) (FCRA). In reviewing the grant of summary judgment, we examine the record de novo, applying the same standard as that used by the district court under Fed. R. Civ. P. 56(c). See Kaul v. Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996). Thus, we de termine whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that the re is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
See id. Having applied this standard, we affirm. 1 In early 1996, plaintiff applied for a loan to refi nance the mortgage on her home. Included in her initial application were cop ies of her 1993 and 19942 Plaintiff and her husband were divorced on June 14, 1995.

3 The inability to verify income and insufficient (orno) credit file are two of several reasons for denying credit included on the model checklist approved for use by the Board of the Federal Reserve System. See 12 C.F.R. Pt. 202, App. C. -3- income tax returns. In her 1993 joint income tax r eturn, plaintiff listed her occupation as “rental properties,” and her husband’ s occupation as “general contractor.” The 1993 income tax return reflected no capital gains. Plaintiff’s individual 1994 income tax return reflected total i ncome of approximately $22,000, with approximately $15,000 of that amount in capital gains from the sale of investment properties. 2Plaintiff also submitted a work-copy of her indiv idual 1995 tax return. The work copy reflected total inc ome of approximately $43,000, of which $37,500 was capital gains from the sale of rental properties. Plaintiff purchased properties, improved them, and sold them for a profit. However, while her loan application was pending, pl aintiff had no real estate property for rent or for sale. Plaintiff’s loan application was submitted to BOMC underwriters in Dallas for review. The loan was reviewed using the underw riting guidelines of the Federal National Mortgage Association (FNMA). Plai ntiff’s application was initially denied because the underwriter was “unabl e to verify [plaintiff’s] income” and because of “insufficient credit file.” 3 Appellant’s App., Vol. I, tab E at 96. After the initial denial, plaintiff submitt ed a copy of her 1995 income tax-4-

return and her application was reconsidered but was again denied due to inability to verify her income. See id. at 137. After both denials, plaintiff received a Statement of Credit Denial, Termination, or Change informing her that the reaso n her application had been denied was because BOMC was “[u]nable to [v]erify [ i]ncome.” Appellant’s App. Vol. I at 96, 150. The notices additionally i nformed plaintiff that information was obtained from an “outside source other than a consumer reporting agency.” Id.
Fair Credit Reporting Act Section 1681m(b) of the Fair Credit Reporting Act i n effect at the time plaintiff applied for her loan provided in pertinent part: (b) Adverse action based on reports of persons othe r than consumer reporting agencies Whenever credit for personal, family, or household purposes involving a consumer is denied . . . eithe r wholly or partly because of information obtained fr om a person other than a consumer reporting agency bearing upon the consumer’s credit worthiness, credit stand ing, credit capacity, character, general reputation, per sonal characteristics, or mode of living, the user of suc h information shall, within a reasonable period of ti me, upon the consumer’s written request for the reasons for such adverse action received within sixty days afte r learning of such adverse action, disclose the natur e of the information to the consumer. The user of such information shall clearly and accurately disclose t o the consumer his right to make such written request at the-5- time such adverse action is communicated to the consumer. 15 U.S.C. § 1681m(b) (1995). The parties disagree about whether plaintiff proper ly requested the identity of the “person other than a consumer reporting agen cy” who provided information relevant to her application. In any event, it was not until plaintiff took the deposition of one of BOMC’s underwriters that she l earned that the “outside source[s]” referred to in the denial notices were the tax returns she herself had provided with her application. Plaintiff does not contend that BOMC relied upon information from a third party in denying her loan application but, instead, argues that BOMC’s failure to tell her that the denial was based on information obtained from her tax returns violated § 1681m(b). The district court held that “[i]n the absence of a ny evidence that BOMC relied on any information provided by a third party , the Court finds the FCRA disclosure requirements do not apply under the fact s of this case.” Appellant’s App. Vol. II, tab P at 12. We agree. Plaintiff argues that the plain language of the statute supports her position. She contends that the law requires disclosure when information comes from “a person other than a consumer reporting agency,” and that she is just such a person. While there are no cases, published or o therwise, discussing this issue,-6-

we conclude that traditional canons of statutory co nstruction dictate the outcome reached by the district court. The starting point of every statutory construction problem is with the language of the statute itself. See Autoskill Inc. v. National Educ. Support Sys.,
Inc. , 994 F.2d 1476, 1484 (10th Cir. 1993). “It is ourduty to give effect, if possible, to every clause and word of a statute.” United States v. Menasche , 348 U.S. 528, 538-39 (1955) (quotation omitted). Secti on 1681m(b) requires disclosure of the nature of adverse credit informat ion “[w]henever credit . . . is denied . . . either wholly or partly because of information obtained from a person other than a consumer reporting agency bearing upon the consumer’s credit worthiness . . . .” (Emphasis added). Our focus f or purposes of this case are the italicized words “person” and “consumer” in the for egoing quoted clause. We conclude that the use of two different terms, “pers on” and “consumer,” in this clause means that the two cannot be the same entity

. In the definition section accompanying this subchap ter to the Consumer Credit Protection Act, “person” is defined broadly to mean “any individual, partnership, corporation, trust, estate, cooperativ e, association, government or governmental subdivision or agency, or other entity .” “Consumer,” on the other hand, is defined only as “an individual.” See 15 U.S.C. § 1681a (b) & (c). Thus, the term “individual” can be identified in only one of two ways: as a person, or-7-

as a consumer. To describe an individual as a “person” reflects the choice not to also include that individual in the category reserv ed for consumers. Therefore, when Congress mandated disclosure where credit is d enied on the basis of information “obtained from a person other than a co nsumer reporting agency,” it meant an individual other than a consumer. If this were not the intended meaning, the statute would refer to information “obtained from a person or a

consumer other than a consumer reporting agency.” In addition to analysis of the statutory language i tself, courts look to the purpose and intent of a statute when deciding what its terms mean. See United States v. Shewmaker , 936 F.2d 1124, 1127 (10th Cir. 1991). The purpose of FCRA is to ensure accuracy and fairness in credit r eporting and to require that such reporting is confidential, accurate, relevant, and proper. See 15 U.S.C. § 1681. FCRA enables consumers to protect their reputations, see Ackerley v. Credit Bureau of Sheridan, Inc. , 385 F. Supp. 658, 659 (D. Wyo. 1974), and to protect themselves against the dissemination of fal se or misleading credit information, see Conley v. TRW Credit Data , 381 F. Supp. 473, 474 (N.D. Ill. 1974). Information contained in a loan applicant’s income tax return should not contain any information that is false or misleading about the applicant. When negative information is gleaned from the consumer’s own records, the consumer is aware of that information and no disclosure is n ecessary. Thus, the protective-8-

purpose of FCRA is not served by requiring a credit or to disclose information that came from the consumer herself. That this interpretation is the correct one is bols tered by the fact that, shortly after the events giving rise to this case o ccurred, Congress amended the title to subsection (b) of § 1681m. That title now reads: “Adverse action based

on information obtained from third parties other than consumer reporting agencies.” 15 U.S.C. § 1681m(b) (1998) (emphasis a dded). While the language of the statute, itself, continues to refer to “info rmation obtained from a person other than a consumer reporting agency,” we think the change in the subtitle is some evidence indicating Congressional intent to ex clude information from the consumer in this disclosure requirement. There is no evidence to dispute BOMC’s contention that the outside source relied upon in denying the loan was plaintiff’s owntax returns. While we agree with the district court that BOMC’s checking of the “outside sources” box on the denial notice was confusing, the fact remains that BOMC did not rely on third party or “outside” information in denying plaintiff’s loan application. While BOMC could have avoided much of the confusion surro unding this loan application by responding in a timely and courteous manner to plaintiff’s inquiry regarding the nature of the “outside sources,” its failure to do so did not trigger liability under the statute.4 The parties do not argue that resort to the McDonnell Douglas burden (continued...) -9- Equal Credit Opportunity Act Plaintiff’s business at the time she applied for th e loan was to purchase real property, refurbish it, and then rent or resel l it. She alleges that she was discriminated against on the basis of her gender inviolation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691-1691(f), because BOMC did not believe that a woman could successfully engage in the real estat e construction industry. The district court analyzed this claim in the same manner as discrimination claims brought under Title VII. Thus, to establisha prima facie case, plaintiff was required to show (1) she is a member of a prote cted class; (2) she applied for a loan from BOMC; (3) she was qualified for the loan; and (4) despite being qualified her loan application was denied. See Mercado-Garcia v. Ponce Fed. Bank , 979 F.2d 890, 893 (1st Cir. 1992) (applying tradi tional analysis of McDonnell Douglas Corp. v. Green , 411 U.S. 792 (1973), to ECOA case); Moore v. United States Dep’t of Agric. , 55 F.3d 991, 994 (5th Cir. 1995) (implying that McDonnell Douglas would apply to ECOA case but for fact that plainti ffs had direct evidence of discrimination); but see Latimore v. Citibank Fed. Sav. Bank , 151 F.3d 712, 713-15 (7th Cir. 1998) (rejecting McDonnell Douglas standard in credit context in favor of conventional proof methods). 4 The district court held4 (...continued)

shifting analysis is improper. However, as noted above, the Seventh Circuit has recently rejected that standard in most credit discrimination cases. See Latimore v. Citibank Fed. Sav. Bank , 151 F.3d 712, 713-15 (7th Cir. 1998). Under eith er analysis, however, the plaintiff must demonstrate that he or she was a qualified borrower in the first place. See id. at 714; Moore v. United States Dep’t of Agric. , 55 F.3d 991, 994 (5th Cir. 1995). Because the re solution of that issue is determinative here, we do not reach the question of whether the McDonnell Douglas standard applies in credit discrimination c ases. -10- that plaintiff had failed to establish a prima faci e case because she had not proven that she was qualified for the loan. We agree. BOMC relied on FNMA underwriting guidelines in eval uating conventional home loans generally and plaintiff’s loan applicati on in particular. Section 202.04 of those guidelines states:

A capital gain or loss is generally a one-time transaction. Therefore it should not usually be considered as either a gain or loss in determining income. However, if the borrower’s business has a constant turnover of assets that produces regular g ains and losses, that capital gain or loss may be consid ered. (An example of this is the person who buys old hous es, remodels them, and sells them for a profit.) If th e borrower has operated in this manner over a period of time, the lender may develop an average of the pasttwo years’ gains or losses for consideration in the inc ome calculation. If this source represents a substanti al portion of the borrower’s income, the lender should review tax returns for at least the last three year s to get an accurate picture of the average earnings from th is source. For example, an asset sold during the yearmight be an income-generating asset, resulting in a reduc tion in future income after the sale.-11-

R. Vol. II, tab P at 7. As the district court note d, plaintiff originally presented two tax returns to BOMC, only one of which, the 199 4 return, reflected a capital gain. The court reasoned:

Based on the FNMA guideline, a 2-year capital gain average can be used to determine income but three y ears is to be documented and reviewed when a capital gai n represents a substantial portion of the applicant’s income. The capital gains realized by plaintiff an d reflected on her 1994 tax return and the work-copy of plaintiff’s 1995 tax return represented a substanti al portion of her income for those years. Although th e draft of the 1995 tax return reflected a capital ga in, there were still only two years of capital gain, not the three recommended under the FNMA guidelines. Furthermore, the capital gains reflected on the 199 4 and 1995 tax returns were generated by the sale of plai ntiff’s income generating rental properties. Clearly, this would affect plaintiff’s future income. Id. at 503. Plaintiff argues that granting summary judgment to BOMC on the basis of the above reasoning was error. She points to the o pinion of her expert which she contends establishes the presence of a material iss ue of fact regarding whether she was qualified for the loan. The district court dis missed the expert’s contentions as “only conclusory allegations.” See id. We agree. Plaintiff’s expert stated only that plaintiff “qual ified under the [FNMA] guidelines relied upon by Banc One.” R. Vol. I at 283. He did not, however, specifically rebut BOMC’s conclusion that plaintiff failed to qualify under the-12-

FNMA guidelines relative to capital gains. Contrary to plaintiff’s argument, the testimony of an expert can be rejected on summary j udgment if it is conclusory and thus fails to raise a genuine issue of material fact. See Evers v. General Motors Corp. , 770 F.2d 984, 985-87 (11th Cir. 1985); cf. Allen v. Muskogee , 119 F.3d 837, 843-44 (10th Cir. 1997) (distinguishing Evers and refusing to disregard an expert’s opinion that was based on spe cific facts in the record). While the expert testified that plaintiff was quali fied under a number of other investor guidelines, plaintiff cannot force B OMC to deviate from its standard practice of relying on the FNMA guidelines in order to accommodate her particular situation. See Beaird v. Seagate Tech., Inc. , 145 F.3d 1159, 1169 (10th Cir. 1998) (holding that plaintiff in a RIF c ase brought under the Age Discrimination in Employment Act could not defeat s ummary judgment by arguing that she would have been retained if differ ent RIF criteria had been used). Because we agree with the district court that plain tiff has failed to present a prima facie case of gender discrimination under the ECOA, we need not reach plaintiff’s arguments regarding pretext or discriminatory motiv e. We further agree with the district court that plain tiff’s allegedly direct evidence of discrimination is inadequate to defeat BOMC’s motion for summary judgment. There is no evidence that the people who commented on her marital-13-

status and the role of her ex-husband in their real estate rehabilitation business had any responsibility for reviewing or approving h er loan applications. Finally, the district court was also correct to fin d that plaintiff’s statistical evidence did not raise a genuine issue of material fact regarding whether plaintiff had been discriminated against because of her gende r. Without evidence that divorced men had not been asked for their divorce r ecords when applying for loans, the evidence is not probative of gender disc rimination. The judgment of the United States District Court fo r the Western District of Oklahoma is AFFIRMED.