Opinion ID: 182624
Heading Depth: 2
Heading Rank: 4

Heading: The Equal Credit Opportunity Act

Text: The district court also dismissed Davis’s ECOA claim under Rule 12(b)(6). The ECOA makes it illegal for creditors to “discriminate against any applicant, with respect to any aspect of a credit transaction . . . on the basis of race.” 15 U.S.C. § 1691(a)(1). The statute defines “applicant” as “any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.” 15 U.S.C. § 1691a(b). To state a claim under the ECOA, Mrs. Davis had to allege that she was an “applicant” and that the defendants treated her less favorably because of her race. See Moran Foods, Inc. v. MidAtlantic Market Development Co., 476 F.3d 436, 441 (7th Cir. 2007) (finding no need to resolve threshold issue of whether a plaintiff was an “applicant” under the ECOA because plaintiff failed to submit sufficient evidence of discrimination under the ECOA to survive summary judgment). Because Mrs. Davis did not allege that she applied for an extension, renewal, or a continuation of credit within the two-year statute of limitations for ECOA claims, the district court found that Mrs. Davis was not an “applicant” under the statute and granted the defendants’ motion to dismiss. We respectfully disagree and find that dismissal of Mrs. Davis’s ECOA claim on this ground was error, though the error turned out to be harmless. Mrs. Davis relies on 12 C.F.R. § 202.2(e), which further defines “applicant” under the ECOA as “any person who requests or who has received an extension of credit 16 No. 10-1549 from a creditor, and includes any person who is or may become contractually liable regarding an extension of credit.” She contends that the defendants’ proposed loan modifications and demands or payment qualify her as an applicant under this definition. She also contends that the defendants’ collection procedures and payment demands were “credit transactions” under 12 C.F.R. § 202.2(m), which defines such transactions broadly as “every aspect of an applicant’s dealings with a creditor regarding an application for credit or an existing extension of credit (including but not limited to, information requirements; investigation procedures; standards of creditworthiness; terms of credit; furnishing of credit information; revocation, alteration, or termination of credit; and collection procedures).” Mrs. Davis did not apply for credit from the defendants during the ECOA’s statute of limitations, nor was there a change to the terms of her existing loan. However, Mrs. Davis alleged that on September 28, 2005, the defendants offered to modify the terms of her loan, and that the terms under which that offer was made were racially discriminatory. In light of the broad regulatory definitions, we find that Mrs. Davis, as the recipient of the defendants’ offer to modify her loan, “received an extension of credit” and thus became an “applicant” under 12 C.F.R. § 202.2(e). See also 12 C.F.R. § 202.2(q) (defining “extend credit and extension of credit” to include “the refinancing or other renewal of credit.”). Remand of Mrs. Davis’s ECOA claim, however, would be fruitless. Identical allegations of racial discrimination No. 10-1549 17 supported Mrs. Davis’s ECOA claim and her FHA claim. The FHA claim survived the defendants’ motion to dismiss but was the target of their motion for summary judgment. As we detail below, when Mrs. Davis was required to come forward with evidence showing race discrimination, she failed to do so. Mrs. Davis’s ECOA claim would suffer the same fate. We affirm the judgment of the district court on this claim.