Court Opinion

ID: 2999447
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:54:11.412803+00
Date Added: 2024-06-11T15:03:08.439706
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 05-3867
THELMA PERRY,
                                               Plaintiff-Appellant,
                                 v.

FIRST NATIONAL BANK, doing business as
FIRST NATIONAL CREDIT CARD,
                                    Defendant-Appellee.
                    ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
          No. 05 C 1470—Robert W. Gettleman, Judge.
                          ____________
     ARGUED MAY 10, 2006—DECIDED AUGUST 25, 2006
                     ____________

 Before FLAUM, Chief Judge, BAUER and EVANS, Circuit
Judges.
   FLAUM, Chief Judge. Plaintiff-Appellant Thelma Perry
filed a class action suit against Defendant-Appellee First
National Bank, d/b/a First National Credit Card (“First
National”) under the Fair Credit Reporting Act (“FCRA” or
“Act”), 15 U.S.C. § 1681 et seq. Perry alleged that the
company violated 15 U.S.C. § 1681m(d) by failing to include
a clear and conspicuous statement of certain disclosures
required under the FCRA.
  First National filed a motion for summary judgment. The
district court granted First National’s motion, finding that
2                                                No. 05-3867

amendments to FCRA had eliminated private rights of
action to enforce § 1681m. The district court also granted
First National’s motion to strike an expert report that Perry
attempted to submit in support of her claim.
  Perry sought to amend her complaint to allege that First
National’s offer of credit was a sham, not a firm offer of
credit, and that, pursuant to 15 U.S.C. § 1681b(c)(1)(B)(i),
First National was prohibited from accessing her consumer
credit report. The district court denied Perry’s motion to
amend, finding that the credit offer was a firm offer and
that amending the complaint would be futile.
  Perry appeals the grant of summary judgment for First
National and the denial of her motion to amend. For the
following reasons, we affirm.

                      I. Background
  Perry received a credit solicitation mailing from First
National, dated February 14, 2005, offering her a pre-
approved Visa credit card with a $250 limit. The mailing
contained a letter as well as a brochure setting forth the
terms and conditions of the offer. One paragraph of the
brochure, titled “Fair Credit Report Act Notice” (“Notice”)
advised recipients in bold letters that “the credit bureau
gave us your name and address and indicated that you
met our minimum credit criteria,” and that “you can tell
credit bureaus to stop using your credit information for this
purpose.” The solicitation letter itself does not specifically
refer to the Notice.
  Perry did not authorize First National to access her
consumer credit report. She alleges that First National
accessed her consumer report and used a consumer report-
ing agency to target certain people, e.g., individuals with
poor credit or individuals who recently obtained bankruptcy
discharges, for sub-prime credit offers.
No. 05-3867                                                 3

  Perry alleged in her complaint that First National
violated 15 U.S.C. § 1681m(d) by failing to include a “clear
and conspicuous” statement of certain disclosures required
by the FCRA. Perry tried to introduce the report of Timothy
Shanahan (“Shanahan report”), a professor of education at
the University of Illinois at Chicago, to support her argu-
ment that the Notice was not “clear and conspicuous.” The
Shanahan report included a “legibility analysis.”
  The district court found that Perry did not have a statu-
tory right to bring a private cause of action under
§ 1681m(d), due to a 2003 amendment to the FCRA that
eliminated the right to bring such actions. The district court
therefore granted summary judgment for First National.
The district court also granted First National’s motion to
strike Shanahan’s report, explaining that “[b]ecause no
private right of action exists under § 1681m, an evaluation
of the Notice is not relevant to the instant case.”
  Perry also argued that even if her claim under § 1681m(d)
could not succeed, she should be allowed to amend her
complaint to plead a violation of 15 U.S.C.
§ 1681b(c)(1)(B)(i). Section 1681b(c)(1)(B)(i) permits a
consumer credit agency to furnish a consumer report even
though the consumer has not initiated or authorized the
release only if the credit or insurance provider is extend-
ing the consumer a “firm offer of credit.” Perry contends
that the credit solicitation was not a firm offer of credit
because it was for such a small amount of credit that it was
virtually worthless. The district court disagreed and found
that Perry could not state a claim under § 1681b(c)(1)(B)(i),
because First National’s credit offer was a “firm offer of
credit.” The district court denied Perry’s motion to amend,
finding that although the minimum amount of credit that
First National offered was small, the interest rate was
clear, approval was guaranteed, and the credit card did not
contain usage limitations.
4                                                    No. 05-3867

                        II. Discussion
  Our review of the district court’s decision on a motion for
summary judgment is de novo. See, e.g., In re Copper
Antitrust Litigation, 436 F.3d 782, 788 (7th Cir. 2006).
Summary judgment is appropriate when, taking all of the
pleadings and evidence in the light most favorable to the
non-moving party, “there is no genuine issue as to any
material fact and . . . the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c); see also
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “We
review a denial of a motion to amend only for an abuse
of discretion.” Butts v. Aurora Health Care, Inc., 387 F.3d
921, 925 (7th Cir. 2004).

A. Private Right of Action To Enforce 15 U.S.C.
   § 1681m
  Perry brought suit to enforce 15 U.S.C. § 1681m(d),
relying on the private right of action provisions contained
in 15 U.S.C. §§ 1681n and 1681o. The district court dis-
missed Perry’s claim, finding that an amendment to the
FCRA had eliminated private rights of action under
§ 1681m.
  Congress amended parts of 15 U.S.C. § 1681m on Decem-
ber 4, 2003, as part of the Fair and Accurate Credit Trans-
actions Act (“FACTA”), Pub. L. 108-159. The question here
is whether the newly added §1681m(h)(8) was designed to
preclude private enforcement of the entirety of § 1681m, or
just § 1681m(h).1 15 U.S.C. §1681m(h)(8) provides:

1
  In Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir.
2006), we stated that FACTA “abolishe[d] private remedies for
violations of the clear-disclosure requirement, which in the future
will be enforced administratively.” Id. at 951. Unlike the present
                                                     (continued...)
No. 05-3867                                                     5

    (h) Duties of users in certain credit transactions
    ....
    (8) Enforcement
    (A) No civil actions
    Sections 1681n and 1681o of this title shall not apply to
    any failure by any person to comply with this section.
    (B) Administrative enforcement
    This section shall be enforced exclusively under section
    1681s of this title by the Federal agencies and officials
    identified in that section.
15 U.S.C. § 1681m(h)(8) (emphasis added).
  Perry argues that FACTA only eliminated private rights
of action to enforce § 1681m(h), not § 1681m in its entirety.
According to Perry, § 1681m(h)(8) is ambiguous on its face.
Specifically, Perry argues that the term “section” as used in
§ 1681m(h)(8) is ambiguous. Perry maintains that we
should interpret the phrase “this section” to apply only
to subsection 1681m(h).
  We cannot accept Perry’s interpretation. Instead, we find
that the phrase “this section” unambiguously refers to
section 1681m as a whole. “Congress ordinarily adheres to
a hierarchical scheme in subdividing statutory sections.”
Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 60
(2004). As the Supreme Court explained in Koons:

1
   (...continued)
case, Murray concerned a credit solicitation offer made before the
effective date of FACTA, id., and the parties did not brief the
question at issue here. Thus, as Perry argues, our statement
about the effect of FACTA on private remedies was dicta, which
is not controlling in this case.
6                                                  No. 05-3867

    This hierarchy is set forth in drafting manuals prepared
    by the legislative counsel’s offices in the House and the
    Senate. The House manual provides:
        “To the maximum extent practicable, a section
        should be broken into—
        “(A) subsections (starting with (a));
        “(B) paragraphs (starting with (1));
        “(C) subparagraphs (starting with (A));
        “(D) clauses (starting with (i)) . . . . ” House Legisla-
        tive Counsel’s Manual on Drafting Style, HLC No.
        104-1, p. 24 (1995).
        The Senate manual similarly provides:
        “A section is subdivided and indented as follows:
        “(a) Subsection.—
        “(1) Paragraph.—
        “(A) Subparagraph.—
        “(i) Clause.- “Senate Office of the Legislative Coun-
        sel, Legislative Drafting Manual 10 (1997).
Koons, 543 U.S. at 60-61 (citation omitted). Cf. In re Farley
Inc., 236 F.3d 359, 361-62 (7th Cir. 2000) (“A legislature
that chooses language with time-tested effects does not have
to narrate those effects in order to achieve them; a statute
is not a legal encyclopedia and need not ape one in order to
specify the normal consequences of ordinary legal words
and phrases.”).
  Congress used these standard designations in § 1681m.
“Section” clearly is used to refer to § 1681m as a whole. For
example, in § 1681m(h)(8)(A)—which provides that the
private right of action provisions of the FCRA do not
apply to violations of “this section”—sections “1681n” and
“1681o” are referred to as “Sections.” In § 1681m(h)(8)(B)—
No. 05-3867                                                   7

which provides that enforcement of “this section” shall be
exclusive to certain federal agencies and officials—“1681s”
is designated a section. It is only logical to assume, then,
that Congress was referring to section 1681m when it
used “this section” in § 1681m(h)(8). Subsection 1681m(h)
also uses the phrase “this subsection” consistently when
referring just to § 1681m(h) and its notice requirements,
rather than § 1681m. See 15 U.S.C. § 1681m(h)(1), (3), (4),
(5), and (6). In this case, the assumption “that Congress
intended the same terms used in different parts of the same
statute to have the same meaning” weighs heavily in favor
of our interpretation of “this section” in § 1681m(h)(8).
Belom v. Nat’l Futures Ass’n, 284 F.3d 795, 798 (7th Cir.
2002); see also Firstar Bank, N.A. v. Faul, 253 F.3d 982, 990
(7th Cir. 2001); Taracorp, Inc. v. NL Indus., Inc., 73 F.3d
738, 744 (7th Cir. 1996).
  In a few places, § 1681m uses “section” to refer to a
smaller subdivision of the statute than the entire section.
However, these uses are entirely clear: the statute specifi-
cally says, for example, “section 1681a(k)(1)(A) of this title,”
or “section 1681a(k)(1)(B) of this title.” 15 U.S.C.
§ 1681m(b)(2)(B); see also § 1681m(d)(1), 1681m(d)(2), and
1681m(h)(5)(D). All of the generic uses of the term “section”
refer to § 1681m as a whole. Cf. Murray v. Household Bank
(SB), N.A., 386 F. Supp. 2d 993, 997 n.4 (N.D. Ill. 2005).
  Perry argues that the placement of §1681m(h)(8) within
the FCRA demonstrates that it applies only to § 1681m(h).
Paragraph (8) is the only part of subsection 1681m(h) that
concerns enforcement. According to Perry, if Congress
intended §1681m(h)(8) to apply to all of § 1681m, it would
have made §1681m(h)(8) into its own subsection,
§ 1681m(i). We are not persuaded. It was logical for Con-
gress to place §1681m(h)(8) where it did, at the very end of
the statute. It is an enforcement provision that applies to
the entire preceding section of the statute. It is also the only
subdivision of § 1681m that concerns enforcement.
8                                                 No. 05-3867

   Perry also argues that if we read all references to “this
section” in § 1681m(h) to refer to § 1681m as a whole,
§ 1681m(c) becomes superfluous and redundant because
both § 1681m(h)(7) and § 1681m(c) create a “reasonable
procedures” defense. Again, we disagree with Perry’s
reasoning. If we read all the uses of “this section” in
§ 1681m(h) to mean “subsection,” we would have to at-
tach the same meaning to the other references to “this
section” in § 1681m. See Taracorp, Inc., 73 F.3d at 744
(“’[W]e assume that the same words mean have the same
meaning in a given act[.]”). Two of these references appear
in § 1681m(c), which provides, in its entirety, that “No
person shall be held liable for any violation of this section if
he shows by a preponderance of the evidence that at the
time of the alleged violation he maintained reasonable
procedures to assure compliance with the provisions of
this section.” 15 U.S.C. § 1681m(c) (emphasis added). It
would not make sense to interpret these two references to
mean “subsection,” because § 1681m(c) itself does not
contain any rules that can be violated or complied with.
  Perry points out another supposed redundancy caused
by reading “this section” to mean the entirety of § 1681m:
“Section 1681s-2(c),” which was also amended by FACTA,
“expressly provides that the private remedies sections, 15
U.S.C. §§ 1681n and 1681o, do not apply to one portion of
§ 1681, namely 15 U.S.C. § 1681m(e), the provision deal-
ing with ‘red flagging’ of reports affected by identity
theft.” According to Perry, “Congress would not amend 15
U.S.C. § 1681s-2(c) to exempt § 1681m(e) from private
remedies if all of § 1681m were already exempt from private
remedies by virtue of § 1681m(h)(8).”
  Although this argument has appeal, redundancy “does not
always produce ambiguity.” Lamie v. U.S. Trustee, 540 U.S.
526, 536 (2004). A “preference for avoiding surplusage
constructions is not absolute.” Id. “Where there are two
ways to read the text”—one that is consistent with the plain
meaning of the text but produces surplusage, and another
No. 05-3867                                                  9

that avoids surplusage but creates ambiguity in the
text—“applying the rule against surplusage is, absent other
indications, inappropriate.” Id. Instead, “[w]e should prefer
the plain meaning since that approach respects the words
of Congress. In this manner we avoid the pitfalls that
plague too quick a turn to the more controversial realm of
legislative history.” Id. Here, the plain meaning of “this
section” is “section 1681m,” and we will not abandon this
reading to avoid a single instance of surplusage.
  Additionally, there is a reasonable explanation for why
Congress included a specific exemption from the private
remedies provision in 5 U.S.C. § 1681s-2(c). This provision
of the FACTA amendment replaced provisions that al-
ready included an exemption from the private remedies
provision. Specifically, it replaced 5 U.S.C. § 1681s-2(c),
which provided that “Sections 1681n and 1681o of this title
do not apply to any failure to comply with subsection (a) of
this section, except as provided in section 1681s(c)(1)(B) of
this title,” and § 1681s-2(d), which provided that “Sub-
section (a) of this section shall be enforced exclusively under
section 1681s of this title by the Federal agencies and
officials and the State officials identified in that section.”
Both before and after FACTA amended 5 U.S.C. § 1681s-
2(c), it included an exemption from private actions for
failure to comply with 5 U.S.C. § 1681s-2(a). FACTA added
two new exemptions, for violations of § 1681s-2(e) and
§ 1681m(e). Both of these provisions establish a duty on the
part of the Federal banking agencies, the National Credit
Union Administration, and the Commission to establish
certain guidelines and prescribe regulations. It was logical
for Congress to include the exemption for violations of
§ 1681s-2(e) in § 1681s-2(c), since both are in the same
section, and it was logical for Congress to also include the
exemption for violations of § 1681m(e), which is related to
§ 1681s-2(e).
10                                               No. 05-3867

   So far as we are aware, every district court consider-
ing this issue—save one—has found that 15 U.S.C.
§ 1681m(h)(8) bars private enforcement of § 1681m in its
entirety. See, e.g., Bruce v. Grieger’s Motor Sales, Inc., 422
F. Supp. 2d 988, 990-93 (N.D. Ind. 2006); Putkowski v.
Irwin Home Equity Corp., 423 F. Supp. 2d 1053, 1060-62
(N.D. Cal. 2006); Stavroff v. Gurley Leep Dodge, Inc.,413
F. Supp. 2d 962, 963-67 (N.D. Ind. 2006); Murray v. Cross
Country Bank, 399 F. Supp. 2d 843, 845 (N.D. Ill. 2005);
Murray v. Household Bank (SB), N.A., 386 F. Supp. 2d 993,
996-99 (N.D. Ill. 2005); Bonner v. Home123 Corp., No.
2:05-CV-146 PS, 2006 WL 1518974, at *3-6 (N.D. Ind. May
25, 2006); Cavin v. Home Loan Center, Inc., No. 05 C 4987,
2006 WL 1313191, at *7 (N.D. Ill. May 10, 2006); Harris
v. Fletcher Chrysler Prods., Inc., No. 1:05-cv-1140-LJM-VSS,
2006 WL 279030, at *1-3 (S.D. Ind. Feb. 2, 2006);
Killingsworth v. Household Bank (SB), N.A., No. 05C5729,
2006 WL 250704, at *3-4 (N.D. Ill. Jan. 31, 2006); Villagran
v. Freeway Ford, Ltd., No. Civ. A. H-05-2687, 2006 WL
964731, at *1 (S.D. Tex. Jan. 19, 2006); Tremble v. Town &
Country Credit Corp., No. 05 C 2625, 2006 WL 163140, at
*1-3 (N.D. Ill. Jan. 18, 2006); Hernandez v. Citifinancial
Servs., Inc., No. 05 C 2263, 2005 WL 3430858, at *2-6 (N.D.
Ill. Dec. 9, 2005); McCane v. America’s Credit Jewelers, Inc.,
No. Civ.A. 05 C 5089, 2005 WL 3299371, at *1-7 (N.D. Ill.
Dec. 1, 2005); Pietras v. Curfin Oldsmobile, Inc., No. Civ.A.
05 C 4624, 2005 WL 2897386, at *2-5 (N.D. Ill. Nov. 1,
2005).
  Perry has directed our attention to the one case in which
a district court decided that “this section” in 15 U.S.C.
§ 1681m(h)(8) only bars private rights of action to enforce
§ 1681m(h). In Barnette v. Brook Road, Inc., No. 3:05CV590,
2006 WL 1195913 (E.D. Va. May 3, 2006), the court found
significant that section 312(f) of the FACTA amendments
provides that “[n]othing in this section, the amendments
made by this section, or any other provision of this Act shall
be construed to affect any liability under section 616 or 617
No. 05-3867                                                 11

of the Fair Credit Reporting Act (15 U.S.C. [§§] 1681n,
1681o) that existed on the day before the date of enactment
of this Act.” Barnette, 2006 WL 1195913, at *4. 15 U.S.C.
§§ 1681n and 1681o contain the provisions establishing a
private right of action to enforce the FCRA. According to the
Barnette court, “§ 312(f) dictates that private individuals
may still enforce the requirements of § 1681m that ante-
dated FACTA.” Barnette, 2006 WL 1195913 at *4.
  We respectfully disagree with the Barnette court’s analy-
sis. While section 312(f) of FACTA provides that the
amendments shall not “affect any liability” under 15 U.S.C.
§§ 1681n and 1681o, it says nothing about who has the right
to bring suit to hold responsible parties liable under
§§ 1681n and 1681o. Our reading of § 1681m(h)(8) has no
effect on First National’s potential liability for violations of
§ 1681m. First National can still be held liable for any
violation, but only by the federal agencies and officials
identified in 15 U.S.C. § 1681s. See 15 U.S.C. § 1681m(h)(8).
   In sum, we affirm the district court’s decision to dismiss
Perry’s claim. The unambiguous language of § 1681m(h)(8)
demonstrates that Congress intended to preempt private
causes of action to enforce § 1681m. Because “[o]ur inquiry
must cease if the statutory language is unambiguous and
‘the statutory scheme is coherent and consistent,’ ” we will
not consider Perry’s arguments regarding the legislative
history of FACTA. Ioffe v. Skokie Motor Sales, Inc., 414 F.3d
708, 711 (7th Cir. 2005) (quoting Robinson v. Shell Oil Co.,
519 U.S. 337, 340 (1997) (quoting United States v. Ron Pair
Enters., Inc., 489 U.S. 235, 240 (1989))). We note, however,
that the legislative history of FACTA is silent on the
question of whether Congress intended to preclude private
rights of action to enforce the entirety of § 1681m. “An
inference drawn from congressional silence certainly cannot
be credited when it is contrary to all other textual and
contextual evidence of congressional intent.” United States
v. Rivera, 153 F.3d 809, 812 (7th Cir. 1998) (quoting Burns
12                                                No. 05-3867

v. United States, 501 U.S. 129, 136 (1991)) (internal quota-
tion marks omitted). Finally, we find that the district court
did not err by striking the report and testimony of Dr.
Shanahan, which were offered by Perry solely to support his
claim under § 1681m(d).

B. Firm Offer of            Credit     Under      15    U.S.C.
   § 1681b(c)(1)(B)(i)
  Perry argued before the district court that she should be
allowed to amend her complaint to allege that First Na-
tional’s credit solicitation was not a firm offer of credit
and thus that First National was prohibited by 15 U.S.C.
§ 1681b(c)(1)(B)(i) from obtaining her credit information
to make the solicitation. The district court denied the
motion to amend, finding that the credit solicitation was
a firm offer and that it would be futile for Perry to amend
her complaint. According to the district court, Perry’s
allegations were distinguishable from those made by the
plaintiff in Cole v. U.S. Capital, 389 F.3d 719 (7th Cir.
2004), in which we reversed a grant of summary judg-
ment for defendants on a similar FCRA claim. The dis-
trict court reasoned that although First National’s credit
solicitation offered a small minimum amount of credit,
Perry failed to allege that the credit card’s interest rate was
unclear, that approval was not guaranteed, or that there
were any usage limitations on the credit line.
  Under 15 U.S.C. § 1681b(c), a credit or insurance provider
can obtain a consumer’s credit information from a credit
agency without the consumer’s permission only if the
provider is making a “firm offer of credit” to the consumer.
15 U.S.C. § 1681b(c)(1)(B)(i). “Firm offer of credit” is defined
by statute 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
No. 05-3867                                                 13

offer, except that the offer may be further conditioned on
one or more of” several conditions that are not relevant to
this appeal. 15 U.S.C. § 1681a(l).
  In determining “whether the offer of credit comports with
the statutory definition, a court must consider the entire
offer and the effect of all the material conditions that
comprise the credit product in question. If, after examining
the entire context, the court determines that the ‘offer’ was
a guise for solicitation rather than a legitimate credit
product, the communication cannot be considered a firm
offer of credit.” Cole, 389 F.3d at 727-28; see also Murray,
434 F.3d at 955-56.
  Perry relies on Cole to argue essentially that First Na-
tional’s credit solicitation was a sham, not a firm offer of
credit, because it offered only a small amount of credit and
required payment of comparatively large fees. Perry alleged:
    The solicitation offers a minimum credit line of $250.
    However, if the offer is accepted, the consumer is
    charged a processing fee of $9.00 (which is due with the
    application), an “acceptance” fee of $119.00, an annual
    membership fee of $50.00, and a “participation” fee of
    $72.00 per year (charged at a rate of $6.00 per month),
    for a total of $184.00 in fees for the opening of a credit
    card account, with $175.00 appearing on the first bill
    that the cardholder would receive. This means that the
    effective amount of credit being granted with the card
    is $75.00, with an outstanding balance of $175.00 that
    is subject to an annual percentage rate of 18.9%. The
    amount of credit being offered is therefore virtually
    worthless, and does not constitute a firm offer of credit.
  We agree with the district court that First National’s
credit solicitation constituted a firm offer of credit. In Cole,
we identified three factors supporting the appellant’s
argument that the defendant’s solicitation was not a firm
offer: 1) it was not clear that credit approval was guaran-
14                                               No. 05-3867

teed; 2) the precise rate of credit and other material terms
were not included in the solicitation; and 3) the credit
card limit, $300, was relatively small in relation to the
known limitations of the card, which could be used only
toward a vehicle purchase at a particular car dealership.
Cole, 389 F.3d at 728. The Cole Court found that the appel-
lant’s pleadings reasonably supported the appellant’s claim
that the defendant’s offer was a sham, made only to justify
accessing consumer credit reports and solicit buyers for the
car dealership. Id. The credit solicitation expressly stated
that “[g]auranteed approval is neither express nor implied,”
which “create[d] a question whether the offer of credit
w[ould] be honored.” Id. Additionally, “the relatively small
amount of credit combined with the known limitations of
the offer—that it must be used to purchase a
vehicle—raise[d] a question of whether the offer ha[d] value
to the consumer.” Id. The Court also found that the missing
material terms from the credit solicitation “render[ed] it
impossible for the court to determine from the pleadings
whether the offer ha[d] value.” Id.
   The credit solicitation at issue in this case does not
present the same problems as the solicitation in Cole. First,
it is clear from the face of First National’s solicitation that
recipients are preapproved. The solicitation states, “Your
good standing has been found creditworthy by Legacy Visa
and that qualifies you for a new Visa account.” Perry does
not argue that she or any class member was denied credit
upon responding to the solicitation. Second, the interest
rate for the credit card is stated in the terms and conditions
brochure sent with the credit solicitation, and is set at 18.9
percent.
  Third, although the credit limit is quite low, the card
can be used to purchase any products or services for
which Visa is accepted. This is in stark contrast to the
credit offered in Cole, which could be used only toward
the purchase of a vehicle at a particular car dealership.
No. 05-3867                                                   15

In Cole, the cost of purchasing a vehicle dwarfed the
value of the credit offer. According to Perry, the credit
line she was offered actually was much worse than the
one at issue in that case, because Cole concerned a $300
credit line, whereas she was offered only “$75 in effective
credit.” Perry’s argument is somewhat misleading. $75
would be the available credit limit in the first month the
credit card was used. The processing fee ($9) and acceptance
fee ($119) are one-time charges. Once these are paid, the
credit recipient would be required to pay $6 per month for
the participation fee and $50 the following year for the
yearly membership fee.
  We recognize that First National’s credit solicitation
requires card holders to pay a significant amount of
money in fees, which are quite high in relation to the credit
line offered. We realize that this is not an attractive deal for
the great majority of consumers. However, the card is not
without value. If the credit card holder paid off the card
each month, the card would allow him or her to make
almost $3000 in purchases in one year. The credit card
holder would also build up a credit rating, which is useful
to individuals who are trying to establish credit for the first
time or to reestablish good credit. Additionally, First
National’s offer was not a “guise for solicitation,” Cole, 389
F.3d at 728, or “a sham offer used to pitch a product rather
than extend credit,” Murray, 434 F.3d at 955. The only
product First National offered was a credit line. Taking
these factors together, we find that the district court did not
err by denying Perry’s request to amend her complaint to
add her claim under 15 U.S.C. § 1681b(c)(1)(B)(i).2

2
  In reaching this conclusion, we have considered our dissenting
colleague’s unease that First National’s credit offer will be
accepted only by those consumers who do not fully understand the
offer’s terms or by those who cannot obtain credit on more
                                                   (continued...)
16                                                    No. 05-3867

  Additionally, we affirm the district court’s ruling to
deny Perry’s request to obtain discovery on the percentage
of consumers who responded to First National’s solicitation,
the percentage that received credit cards, and the amount
of money First National earns in interest as compared to
the amount in earns in fees from credit cards like the one
offered to Perry. Perry has not demonstrated that this
evidence is relevant to our inquiry. As Perry admits, most
consumers who receive credit solicitations do not apply for
the offered credit card, regardless of how attractive the
terms of the offer are. Also, Perry does not suggest that
many consumers applied for First National’s credit cards
and were rejected. Finally, Perry does not explain why the
district court should have let it obtain information on the
amount of money First National earns in interest versus in
fees. For instance, what ratio of interest charges versus fees
would demonstrate that a credit offer was not a “firm offer”?
The fact that First National may earn a significant portion
of its revenues from fees charged for credit cards like those
offered to Perry does not make its credit solicitation a

2
   (...continued)
favorable terms, such as individuals with very poor credit
histories or who are emerging from bankruptcy. However, as the
dissent acknowledges, the FCRA is designed to protect the privacy
of consumers’ credit histories, not to prevent consumers from
making unwise financial choices even when they are provided
with all the material terms necessary to make informed decisions.
Additionally, we are concerned that accepting our colleague’s
position may have the unintended consequence of precluding
consumers with past financial problems from obtaining credit at
all, and thus make it even more difficult for them to receive loans
and mortgages. We are understanding of the plight of consumers
who must choose between having no credit and having credit on
less than favorable terms, but we also recognize that a company
like First National will not offer credit to consumers on terms that
will not allow it to earn a return.
No. 05-3867                                                 17

sham—the focus of our inquiry is whether the credit
solicitation offers value to the consumer, and in this case we
have determined that it does.

                      III. Conclusion
  For the foregoing reasons, we AFFIRM the district court in
full.

  EVANS, Circuit Judge, dissenting. I respectfully dissent,
because I do not agree that the solicitation First Na-
tional sent to Perry can reasonably be considered a “firm
offer of credit.”
  True, the solicitation in this case does not present the
exact same problems as the one at issue in Cole v. U.S.
Capital, 389 F.3d 719 (7th Cir. 2004). In this case, recipi-
ents are “preapproved,” the interest rate and other terms
are disclosed, and the card can be used to do more than
simply buy a car at a particular dealership. If those narrow
factors were all that Cole required for a “firm offer of
credit,” I would gladly join the majority opinion.
  But Cole emphasizes that under the FCRA, a firm offer of
credit must have “sufficient value for the consumer,” 389
F.3d at 726. The majority opinion, I believe, glosses over
this larger point. As we explained, “A definition of `firm
offer of credit’ that does not incorporate the concept of value
to the consumer upsets the balance Congress carefully
struck between a consumer’s interest in privacy and the
benefit of a firm offer of credit for all those chosen through
18                                                 No. 05-3867

the pre-screening process.” Id. at 726-27. The three factors
discussed by the majority are not the entire analysis.
In Cole we recognized more broadly that the “terms of an
offer . . . may be so onerous as to deprive the offer of any
appreciable value.” Id. at 728. To determine whether an
offer meets the standards of the FCRA,
      a court must consider the entire offer and the effect
      of all the material conditions that comprise the
      credit product in question. If, after examining the entire
      context, the court determines that the “offer” was a
      guise for solicitation rather than a legitimate credit
      product, the communication cannot be considered a firm
      offer of credit.
Id.
  I am troubled when I imagine the consumer for whom
First National’s product—with its $9 “processing fee,” $119
“acceptance fee,” $50 “annual membership fee,” and $72
annual “participation fee,” all coming out of a mere $250
line of credit—would be considered to carry appreciable
value. Credit card companies employ savvy marketing
analysts and sophisticated algorithms to target their
offers toward particular niches of consumers. For anyone
who understands credit card marketing schemes, it is
difficult not to conclude that First National is using its
privileged access to financial data simply to extract one
creative fee on top of another from consumers who are
either naive, desperate, or both.
  The majority, echoing a point made by First National’s
counsel at oral argument, explains that the card is, in
theory, “not without value” because a card holder who
paid off her entire balance every month would have
almost $3,000 in purchasing power (albeit in small revolv-
ing increments) each year. Of course, a consumer who has
the cash flow to pay her bills in full every month has no
actual need for credit. She would be better off with a bank
No. 05-3867                                                 19

account debit card, for which she would not be required
to enrich First National by $250 the first year and $122
each year thereafter.
   Thus, the only person for whom First National’s product
objectively might have some utility is the consumer
whose financial history is so catastrophic that a card
encumbered by usurious fees, along with 18.9% interest,
is the only option for rehabilitating a credit rating. Even so,
before I could accept assurances about the card’s theoretical
value for such a consumer, I would need to know how many
such card holders—who dutifully avoid late payments and
maxed-out balances—actually are among First National’s
customers or within its target market for this particular
product. I suspect not many, because they’d have better
options.
   Even if the FCRA is intended only to protect consum-
ers’ privacy, not to safeguard them against predatory credit
practices and their own poor financial judgment, I conclude
that First National’s offer is not a “legitimate credit prod-
uct,” id., which is distinguishable from a “sales pitch[ ],” id.
at 727. In Cole, the sales pitch was for a car; in this case, it
is for an unconscionably one-sided financial deal that defies
a reasonable concept of sufficient value. On my reading of
the relevant statute and our precedent, “[s]uch importuning
simply—and understandably—is not among the permissible
reasons for which a credit agency may disclose a consumer’s
credit information. Defining a firm offer of credit as merely
any offer that will be honored elevates form over substance”
and deprives the FCRA “of all serious purpose.” Id. (cita-
tions omitted). For these reasons, I cannot join the majority
opinion.
20                                        No. 05-3867

A true Copy:
      Teste:

                    ________________________________
                    Clerk of the United States Court of
                      Appeals for the Seventh Circuit

               USCA-02-C-0072—8-25-06