Source: https://www.consumercomplianceoutlook.org/2017/second-issue/on-the-docket/
Timestamp: 2019-04-24 10:02:38+00:00

Document:
Reporting an authorized user who is not liable for an account did not violate the FCRA.
Pedro v. Equifax, Inc., 868 F.3d 1275 (11th Cir. 2017). The plaintiff was an authorized user on her parents’ credit card account. After their deaths in 2014, the account became delinquent. TransUnion and Equifax reported the delinquency on the plaintiff’s credit report, with a notation that she was an authorized user. The plaintiff’s class action lawsuit alleged that TransUnion and Equifax willfully violated Section 1681e of the FCRA, which requires consumer reporting agencies preparing consumer reports to “follow reasonable procedures to assure maximum possible accuracy.” The plaintiff alleged that the credit bureaus’ reporting was inaccurate because she was not actually liable on the account and that such reporting caused her credit score to drop 100 points.
The court determined that the plaintiff had standing to file a federal lawsuit because she alleged concrete and actual injury. The court considered the alleged drop in the plaintiff’s credit score and her time spent trying to resolve the issue, and further compared the alleged harm caused by inaccurate reporting with a defamation claim. Nonetheless, the court affirmed the dismissal of the lawsuit, agreeing with the district court that the plaintiff did not establish that TransUnion willfully violated FCRA Section 1681e. To do so, the court stated that the plaintiff must show that TransUnion adopted a reading of the statute that is objectively unreasonable. The court held that TransUnion could have reasonably interpreted the statute to permit it to report technically accurate information (i.e., that the plaintiff was an authorized user). Although the court stated that the better reading of the FCRA would be to require information be both technically accurate and not misleading, it stated that it could not find the alternative interpretation objectively unreasonable.
The Eleventh Circuit affirms the dismissal of a lawsuit against a servicer because the borrower failed to send a Qualified Written Request to a specified address.
The Eighth Circuit rejects borrowers’ attempt to extend right of rescission from three days to three years.
Keiran v. Home Capital, Inc., 858 F.3d 1127 (8th Cir. 2017). Borrowers who had defaulted on their December 2006 mortgage loan sent a notice to the creditor that they were exercising the right of rescission in October 2009 for failure to provide sufficient copies of required TILA disclosures. In ensuing litigation, the borrowers contended that, in addition to not receiving the required number of TILA disclosures, the disclosures contained material inaccuracies related to the finance charge, and the creditor did not respond in a timely fashion or adequately to the notice of rescission. The district court granted summary judgment in favor of the creditor, and the Eighth Circuit affirmed the dismissal. First, the Eighth Circuit noted that the borrowers signed a form acknowledging receipt of the right of rescission, for which Section 1635(c) of TILA creates a rebuttable presumption that the borrower received the notice. The court held that conclusory affidavits denying receipt of the notice, which are not supported by details or other supporting evidence, are insufficient to rebut this presumption. Regarding the allegation concerning inaccurate TILA disclosures, the court held that because the borrowers did not raise such objections in earlier litigation, the allegations were waived. Finally, the court held that because there was no TILA disclosure violation, the borrowers had only a three-day window under 12 U.S.C. §1635(a) to rescind, rather than a three-year window.
The Fourth Circuit addresses SCRA foreclosure protections for servicemembers who reenter active duty service.
Sibert v. Wells Fargo Bank, N.A., 863 F.3d 331 (4th Cir. 2017). In May 2008, the plaintiff, an active duty member of the U.S. Navy, financed the purchase of his home with a loan extended by Advance Mortgage and later sold to Wells Fargo Bank, N.A. After leaving the Navy in July 2008, the plaintiff defaulted on the loan. Wells Fargo sent the plaintiff a default notice a few months later and, in March 2009, initiated nonjudicial foreclosure proceedings. In April 2009, the plaintiff enlisted in the U.S. Army, and in May 2009, Wells Fargo sold the house at a foreclosure sale.
The plaintiff argued that §3953(c) applied and that, accordingly, the foreclosure was invalid because the loan was originated prior to his Army active duty military service. This was an issue of first impression for the district court because it involved more than one period of military service: The plaintiff was in the Navy when the loan was originated, had left military service when foreclosure proceedings were initiated, and then later enlisted in the Army, during which his second period of active duty military service the foreclosure sale took place.
The court rejected the plaintiff’s argument that, although the loan was extended when he was already on Navy active duty service, he nevertheless was entitled to “retroactive protection” when he entered Army active duty service because he became obligated on the loan before he joined the Army. The court found that such an interpretation of the statute would allow a servicemember to circumvent §3953(a)’s requirement that only loans originated before active duty military service qualify for §3953(c)’s protections simply by leaving the military and then reenlisting.
One member of the three-judge panel dissented, accepting the plaintiff’s argument that because the loan was originated before his Army active duty service the statute’s protections ought to apply; additionally, that judge argued that any statutory ambiguities should be resolved in favor of the servicemember.

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