Court Opinion

ID: 9499151
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:39:02.360925+00
Date Added: 2024-06-11T17:59:18.684149
License: Public Domain

EVANS, Circuit Judge,
dissenting.
I respectfully dissent, because I do not agree that the solicitation First National 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, recipients 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 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 *827that 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 revolving 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 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 consumers’ 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 product,” 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, “[sjuch 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. (citations omitted). For these reasons, I cannot join the majority opinion.