Opinion ID: 203195
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Heading: The Role of the FCRA Within the Consumer Credit Protection Act's Statutory Scheme

Text: The Consumer Credit Protection Act, Chapter 41 of Title 15, U.S.C., initially enacted in 1968, is a comprehensive consumer protection statute that accomplishes its purpose through a number of subchapters, each of which regulates a different aspect of or actor in the credit industry. [3] The FCRA is only one of these subchapters. Subchapter I of the Consumer Credit Protection Act is the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., which imposes disclosure requirements on creditors. Subchapter II places restrictions on garnishment of compensation, 15 U.S.C. § 1671 et seq. Subchapter II-A is the Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq., which protects consumers from unfair trade practices by credit repair organizations. Subchapter III is the FCRA, 15 U.S.C. § 1681 et seq., which primarily regulates credit reporting agencies but also places requirements on users of credit information from these agencies. Subchapter IV is the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq., which prohibits discrimination in the extension of credit. Subchapter V is the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. Subchapter VI is the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq., which regulates the participants in electronic fund transfer systems. We turn to certain of the subchapters.
Congress enacted the FCRA in 1970 as part of the Consumer Credit Protection Act to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy. Safeco Ins. Co. of Am. v. Burr, ___ U.S. ___, 127 S.Ct. 2201, 2205, 167 L.Ed.2d 1045 (2007); see TRW Inc. v. Andrews, 534 U.S. 19, 23, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001); see also 15 U.S.C. § 1681. Congress adopted a variety of measures designed to ensure that credit reporting agencies report only appropriate information. Some measures are imposed on agencies directly, others on users of credit information, such as Greenwood. As to users of credit information, the Act sets out a statutory scheme which, among other things, allows the purchase of various forms of information compiled in consumers' credit reports from consumer credit reporting agencies for certain specified business purposes. 15 U.S.C. § 1681b. One of these purposes is to extend credit or insurance to a consumer. Id. § 1681b(a)(3)(A), (a)(3)(C). In 1996, Congress amended the FCRA to allow creditors or insurers to purchase pre-screened lists of names and addresses of consumers who met certain criteria without each consumer's consent as long as they plan to extend to the consumer a firm offer of credit or insurance. Id. § 1681b(c)(1); Pub.L. No. 104-208, § 2404, 110 Stat. 3009, 3009-430 (1996). That provision is at issue in this case. Once a creditor planning to extend firm offers of credit provides a consumer reporting agency with a set of financial criteria, the consumer reporting agency can provide the creditor the contact information, and no more, for consumers who meet those criteria. See 15 U.S.C. § 1681b(c). As a result, the purported extender of credit, here Greenwood, does not receive any consumer's full credit report. Greenwood cannot receive the full credit report without the consumer's permission. Here, Greenwood never received the full credit report. In addition, the Act imposes disclosure requirements on creditors who use pre-screened lists. Id. § 1681m. There is no claim Greenwood failed to comply with these disclosure requirements. The Act provides a private right of action and imposes civil liability on users of credit information and consumer reporting agencies for noncompliance with the requirements of the Act, so long as the person acted willfully, id. § 1681n(a), knowingly, id. § 1681n(b), or negligently, id. § 1681o. In the case of a corporation that willfully fails to comply with any requirement of the Act, a court has discretion to award actual damages or statutory damages between $100 and $1,000 per consumer, in addition to punitive damages and attorneys' fees. See id. § 1681n(a).
This case is not brought under TILA and there is no claim that Greenwood violated TILA. We discuss TILA to put into context the limited purposes of the FCRA. Congress focused on creditors, not credit reporting agencies, when it enacted the TILA in 1968 to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, which would enhance economic stabilization . . . and the competition among the various financial institutions. 15 U.S.C. § 1601(a); see also Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 53-54, 125 S.Ct. 460, 160 L.Ed.2d 389 (2004). The Act requires a creditor to disclose information relating to such things as finance charges, annual percentage rates of interest, and borrowers' rights, see [15 U.S.C.] §§ 1631-1632, 1635, 1637-1639, and it prescribes civil liability for any creditor who fails to do so, see [15 U.S.C.] § 1640. Koons, 543 U.S. at 54, 125 S.Ct. 460. TILA's remedial scheme provides a right of action for both individual and class plaintiffs. See 15 U.S.C. § 1640. If a creditor violates TILA's requirements, a consumer is entitled to the sum of actual damages and statutory damages. The sum varies based on whether the action was maintained on a class or an individual basis and the type of credit transaction involved. See id. Unlike the FCRA, there is no scienter requirement for creditor liability. See id. § 1640(c). Pertinent to our case, the TILA's requirement of disclosure of specific credit terms kicks in at a point in the credit transaction subsequent to a FCRA firm offer of credit. That is, TILA applies at the time an application is provided to the consumer for home equity loans, 12 C.F.R. § 226.5b(b), or before consummation of the transaction for mortgages, id. § 226.17(b). See Soroka v. JP Morgan Chase & Co., 500 F.Supp.2d 217, 222 (S.D.N.Y.2007). Before then, the firm offer of credit is governed by the FCRA disclosure requirements. Here, Sullivan made no further communication after the FCRA firm offer, so the TILA is not implicated.