Opinion ID: 203195
Heading Depth: 2
Heading Rank: 2

Heading: Was Greenwood's Letter a Firm Offer of Credit?

Text: Sullivan brings his action under the FCRA. He may prevail only if he establishes that the letter he received was not a firm offer of credit under the FCRA. Each side relies on a canon of statutory interpretation to support its argument. The plaintiff invokes the Supreme Court's use of the general rule that a common law term in a statute comes with a common law meaning, absent anything pointing another way, in its recent Safeco decision. 127 S.Ct. at 2209. The Court used this canon to interpret the term willfully in the FCRA, 15 U.S.C. § 1681(n)(a), when the statute did not otherwise define the term. Id. Sullivan argues that the common law meaning of the term firm offer of credit would require the disclosure of specific credit terms to the plaintiff. The defendant rightly points out, however, that the term firm offer of credit is not subject to that canon because the term is explicitly defined in the FCRA. The statutory definition imposes no requirement that a firm offer of credit must provide terms for credit such as interest rate and duration. Invoking the canon of expressio unius est exclusio alterius, Greenwood argues that if Congress had wanted to require that more specific credit terms be included in a firm offer of credit, it would have said so. Plaintiff replies that the statutory definition only applies to the term firm and that we should resort to the common law to define what is an offer of credit. He points out that the statute states: The term ` firm offer of credit or insurance' means any offer of credit or insurance to a consumer that will be honored . . . . 15 U.S.C. § 1681a( l ) (emphasis added). He concludes that the term offer still has independent meaning, undefined by the statute. We disagree. We start with the language of the statute and its grammar. Congress chose in its definition to put into quotes for the term it was defining firm offer of credit or insurance, and not just firm. Next, we look to the more complete language of the statute, and conclude plaintiff's reading is inconsistent with the rest of the statute. The Act defines a firm offer of credit or insurance as: any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following: (1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established (A) before selection of the consumer for the offer; and (B) for the purpose of determining whether to extend credit or insurance pursuant to the offer. (2) Verification (A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or (B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability. (3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was (A) established before selection of the consumer for the offer of credit or insurance; and (B) disclosed to the consumer in the offer of credit or insurance. 15 U.S.C. § 1681a( l ). Under this language, an offer of credit meets the statutory definition so long as the creditor will not deny credit to the consumer if the consumer meets the creditor's pre-selection criteria. The term firm offer of credit does not require the offeror include additional terms other than the pre-selection criteria. As one court has colloquially put it, a firm offer of credit under the Act really means `a firm offer if you meet certain criteria.' Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 841 (5th Cir.2004). The statutory scheme imposes disclosure requirements on a firm offer of credit in a variety of ways. The creditor must disclose that information contained in the consumer's consumer report was used, 15 U.S.C. § 1681m(d)(1)(A). It requires disclosure that the consumer received the offer because he satisfied the criteria used to select the customer for the offer, id. § 1681m(d)(1)(B), but does not purport to require the creditor to include more criteria than used here. And the statute requires disclosure that the offer can be conditioned on collateral or other pre-determined criteria, id. § 1681m(d)(1)(c), that the consumer has the right to opt out of pre-screened offers, id. § 1681m(d)(1)(d), and of how the consumer can exercise that right, id. § 1681m(d)(1)(e). Further, the statute contemplates that there will be subsequent stages of communications beyond the firm offer of credit, if the consumer is interested, during which additional terms will be offered. The statute expressly provides that the [firm] offer may be conditioned on one or more of the following. . . . In 15 U.S.C. § 1681a( l )(1), the statute refers to information which the customer will later supply in an application for credit. It also refers to a later decision to extend credit. Id. Thus, the statute is clear that the fact that the initial letter to the consumer does not yet resolve those additional conditions does not mean the letter fails to be a firm offer of credit. The Fifth Circuit's decision in Kennedy, 369 F.3d 833, provides an example. Kennedy involved a situation in which two consumers' joint application for a credit card was rejected after they had received a letter from a bank stating that they were pre-approved for a credit card account. Id. at 837. The court nonetheless found that the letter met the statutory definition of a firm offer of credit, and that the rejection was proper because the consumers could not meet the bank's additional pre-determined creditworthiness criteria. Id. at 841-42. The plaintiff's preferred definition is inconsistent with the Fifth Circuit's approach. We have found no circuit precedent which reads the statute as plaintiff does. The plaintiff reads a Seventh Circuit case, Cole v. U.S. Capital, 389 F.3d 719 (7th Cir.2004), to support his interpretation of firm offer of credit. We disagree. In that case, that court found a mailing not to constitute a firm offer of credit when the mailing purportedly offered a $300 credit line towards the purchase of an automobile but did not include specific credit terms. The court held that the offer was a sham made to justify access to the consumer credit reports, and because it was a guise for solicitation rather than a legitimate credit product, the communication cannot be considered a firm offer of credit. Id. at 728. The problem before us is different from the problem in Cole. As the Seventh Circuit clarified in a later case,  Cole 's objective was to separate bona fide offers of credit from advertisements for products and services, determining from ` all the material conditions that comprise the credit product in question . . . [whether it] was a guise for solicitation rather than a legitimate credit product.' Murray v. GMAC Mortgage Corp., 434 F.3d 948, 955-56 (7th Cir.2006) (quoting Cole, 389 F.3d at 728) (alteration in original). The purpose of the Cole mailing was to identify potential auto buyers, id. at 955, and so the issue in Cole was whether the mailing was a firm offer of credit,  as opposed to a  firm offer of credit, see id. See also Dixon v. Shamrock Fin. Corp., 482 F.Supp.2d 172, 177 (D.Mass.2007) (noting that in Cole the `offer of credit' was in fact a sales pitch for a car dealership). The problem here is not whether this is a bona fide offer of credit. The problem here is also not a bait-and-switch problem. In other statutes, such as the TILA, Congress mandated truth in the descriptions of other credit terms. There is no claim here of untruthful disclosures. Plaintiff argues that Congress intended for individuals whose private credit information is accessed in any form by a creditor to be given something of value in the exchange. The value of the offer made by Greenwood, plaintiff argues, is zero, and so the congressional intent is thwarted. Even if that were the intent, and it were permissible to substitute assumptions about intent for the plain language of the statute, we disagree that the value of the letter to the consumer is zero. There was some value in the letter. Greenwood's letter informed the plaintiff that, based on certain credit information, he had been pre-selected as meeting certain eligibility requirements for the extension of credit. The letter informed him that if he were interested he could contact Greenwood and determine, based on other information, whether he would meet certain conditions. The letter did not guarantee him a loan, but did guarantee that he would not be disqualified from a loan on the basis of the pre-selection criteria. In turn, there was little invasion of consumer privacy. Greenwood never received his full credit report. It received only the plaintiff's contact information and that he met certain pre-selection criteria. This is a minimal invasion of privacy, offset by the value of the information in the letter to the plaintiff. [4] We affirm the entry of judgment for defendant.