Court Opinion

ID: 4279069
Source: CourtListenerOpinion
Date Created: 2018-05-29 17:00:27.551676+00
Date Added: 2024-06-11T14:34:34.228479
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 JOHN T. SHAW, on behalf of himself              No. 16-56587
 and all others similarly situated;
 KENNETH COKE; RAYMOND                              D.C. No.
 RYDMAN,                                        3:13-CV-01295-
                  Plaintiffs-Appellants,           JLS-BLM

                     v.
                                                   OPINION
 EXPERIAN INFORMATION SOLUTIONS,
 INC.,
               Defendant-Appellee.

        Appeal from the United States District Court
           for the Southern District of California
       Janis L. Sammartino, District Judge, Presiding

            Argued and Submitted April 10, 2018
                   Pasadena, California

                      Filed May 29, 2018

   Before: MARY M. SCHROEDER and MILAN D.
SMITH, JR., Circuit Judges, and GERSHWIN A. DRAIN, *
                     District Judge.

            Opinion by Judge Milan D. Smith, Jr.

     *
       The Honorable Gershwin A. Drain, United States District Judge
for the Eastern District of Michigan, sitting by designation.
2      SHAW V. EXPERIENCE INFORMATION SOLUTIONS

                          SUMMARY **

                  Fair Credit Reporting Act

   The panel affirmed the district court’s summary
judgment in favor of defendant Experian Information
Solutions, Inc., in an action brought under the Fair Credit
Reporting Act.

   Plaintiffs alleged that Experian, a consumer reporting
agency, violated the FCRA in the manner in which it
reported short sales on their real property.

    The panel held that plaintiffs’ reasonable procedures and
reasonable reinvestigation claims under 15 U.S.C. §§ 1681e
and 1681i failed because plaintiffs’ credit reports were
accurate.

    Plaintiffs’ failure to disclose claim under § 1681g failed
because Experian clearly and accurately disclosed to them
all information that Experian recorded and retained that
might be reflected in a consumer report.

    Plaintiffs’ request for statutory damages under § 1681n
failed because they did not show a willful violation by
Experian.

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
      SHAW V. EXPERIENCE INFORMATION SOLUTIONS             3

                        COUNSEL

Guerino John Cento (argued), Cento Law LLC,
Indianapolis, Indiana; Matthew J. Zevin, Stanley Law
Group, San Diego, California; for Plaintiffs-Appellants.

Adam Wiers (argued), Jones Day, Chicago, Illinois; Kelly
V. O’Donnell, Jones Day, San Diego, California; for
Defendant-Appellee.

                        OPINION

M. SMITH, Circuit Judge:

    Plaintiffs-Appellants John Shaw, Kenneth Coke, and
Raymond Rydman (collectively, Appellants) brought this
action against Defendant-Appellee Experian Information
Solutions, Inc. (Experian), alleging violations of the Fair
Credit Reporting Act (FCRA), 15 U.S.C. § 1681, et seq.
Between 2010 and 2011, each Appellant executed a short
sale on real property that he owned. Appellants brought this
action against Experian because of the manner in which
Experian reported those short sales. The district court
granted summary judgment in favor of Experian on all
claims. We affirm.

    First, we hold that Appellants’ reasonable procedures
and reasonable reinvestigation claims fail because
Appellants’ credit reports were accurate.            Second,
Appellants’ failure to disclose claim fails because Experian
clearly and accurately disclosed to Appellants all
information that Experian recorded and retained that might
be reflected in a consumer report. Third, Appellants’ request
4     SHAW V. EXPERIENCE INFORMATION SOLUTIONS

for statutory damages under 15 U.S.C. § 1681n fails because
they have not shown a willful violation by Experian.

    FACTUAL AND PROCEDURAL BACKGROUND

I. Credit Reporting Industry

    Experian is a consumer reporting agency (CRA) as
defined by the FCRA. 15 U.S.C. § 1681a(f). CRAs receive
credit information about borrowers and consumers from data
furnishers, such as mortgage lenders and credit card
companies. Furnishers generally report their data to CRAs
using an agreed-upon format, known as Metro 2.
Furnishers’ Metro 2 reporting requirements are specified in
the Credit Reporting Resource Guide (CRRG), which is
published by the Consumer Data Industry Association
(CDIA), a CRA trade association.

    Once CRAs receive credit information from furnishers,
they compile and distribute the information to subscribers
through credit reports, and to consumers through consumer
disclosures. 1 Even though it receives its data input in the
standardized Metro 2 format, each CRA uses its own
proprietary coding format to analyze and report credit
information to subscribers. Experian provides credit reports
to approximately 15,000 subscribers. It delivers its credit
reports in a proprietary computer-generated format that
displays credit information “in segments and bits and bytes,”
but Experian provides technical manuals that enable
subscribers to read and understand the credit reports they

   1
     The Consumer Financial Protection Bureau (CFPB) regulates
CRAs and enforces the FCRA.
      SHAW V. EXPERIENCE INFORMATION SOLUTIONS              5

receive. Subscribers cannot read Experian’s reports without
these technical manuals.

II. Short Sales

    A short sale is a real estate transaction in which the
property serving as collateral for a mortgage is sold for less
than the outstanding balance on the secured loan, and the
mortgage lender agrees to discount the loan balance because
of a consumer’s economic distress. A short sale is a
derogatory credit event that furnishers report to CRAs in a
particular manner. By 2009, the CRRG instructed furnishers
to report short sales to CRAs using an Account Status Code
of “13 or 61-65, as applicable,” a Special Comment of “AU
(Account paid in full for less than the full balance),” and a
Current Balance and Amount Past Due amount of zero. An
Account Status Code of 13 indicates a “[p]aid or closed
account/zero balance,” while 61 through 65 indicates the
account was paid in full and there was a “voluntary
surrender,” “collection account,” “repossession,” “charge-
off,” or “foreclosure . . . started.”

   When Experian receives data reporting a short sale, it
must translate the data into its proprietary coding before it
can export the data. Experian’s technical manual describes
how it codes short sales:

       •   Account type: A mortgage-related
           account, such as a first mortgage or home
           equity line of credit.

       •   “Account condition” and “payment
           status” code: 68, which corresponds to a
           Special Comment of “Acct legally paid in
           full for less than the full balance.” The 68
           automatically populates a 9 into the first
6       SHAW V. EXPERIENCE INFORMATION SOLUTIONS

             position on the payment history grid to
             display the “Settled” status.

         •   Payment history grid showing the final
             status (“Settled”) in the first digit,
             followed by 24 months of payment
             history information.

         •   Date in 25th month in the payment
             history grid corresponds to the date the
             furnisher reported the “Settled” status to
             Experian.

    Thus, in the case of a short sale, the reported account
condition code is 68 (“Account legally paid in full for less
than the full balance”), which then automatically inserts the
number 9 into the payment history grid (to display a
“Settled” status). 2 But a lead payment history code of 9 can
represent multiple derogatory, non-foreclosure statuses.
These include “Settled, Insurance Claim, Term Default,
Government Claim, Paid by Dealer, BK Chapter 7, 11 or 12
Petitioned, or Discharged and BK Chapter 7, 11 or 12
Reaffirmation of Debt Rescinded.”

    Foreclosures, on the other hand, are reported with a lead
payment history code of 8 and an account condition and
payment status code of 94 (“Creditor Grantor reclaimed
collateral to settle defaulted mortgage”). According to
Experian’s technical manuals, it is impossible for Experian’s

    2
      Our prospective references to “code combination 9-68” refers to
accounts with a lead payment history code of 9 and an account condition
code of 68.
       SHAW V. EXPERIENCE INFORMATION SOLUTIONS             7

credit reports to reflect a foreclosure with a lead payment
history code of 9.

    Experian prepares consumer disclosures in a more easily
read format than the credit reports Experian provides to
subscribers. For example, when an account in an Experian
credit report contains code combination 9-68, the consumer
disclosure lists “CLS” (Closed) in the lead payment history
grid position. The disclosure also lists the account’s status
as “Paid in Settlement” with a creditor’s statement of
“Account legally paid in full for less than full balance.”

III.    Fannie Mae

    Fannie Mae is a government-sponsored entity that
purchases loans from certain lenders. The rules governing
Fannie Mae’s operations restrict which loans it can purchase,
and it partly implements those restrictions through its own
proprietary software, called Desktop Underwriter. Fannie
Mae also licenses Desktop Underwriter to certain lenders.
Importantly for Appellants, consumers with a prior
foreclosure must wait seven years before obtaining a new
mortgage through Fannie Mae, whereas consumers with a
prior short sale need wait only two years.

    When a prospective borrower submits a mortgage
application to Fannie Mae, Desktop Underwriter analyzes
credit report data about the prospective borrower obtained
from CRAs. In doing so, Desktop Underwriter relies on
Fannie Mae’s manner of payment code (MOP), which
corresponds to Experian’s lead payment history code. Until
2013, Desktop Underwriter “identified [mortgage accounts]
as a foreclosure if there [was] a current status or [MOP] of
‘8’ (foreclosure) or ‘9’ (collection or charge-off).” In other
words, Fannie Mae elected to treat code 9 the same as it
treated code 8, even though it knew from the instructions
8     SHAW V. EXPERIENCE INFORMATION SOLUTIONS

Experian had provided that code 9 did not represent a
foreclosure, and that it was “necessarily capturing accounts
that [were] not actually foreclosures.” Fannie Mae’s
treatment of lead payment history codes 8 and 9 caused
significant adverse consequences because it led Fannie Mae
to impose a seven-year waiting period on consumers with a
prior short sale, when the waiting period should only have
been two years.

IV.    Discovery of the Reporting Error

    In 2010, consumers with prior short sales began
notifying Experian that lenders had denied them new
mortgages because their files erroneously showed prior
foreclosures. In 2011 and 2012, various sources informed
Experian that Fannie Mae’s Desktop Underwriter software
was identifying short sales as foreclosures due to its
treatment of Experian’s lead payment history code 9.
Experian raised this issue with Fannie Mae, but neither entity
changed its coding.

    Appellants discovered this error during this same time
period. Shaw executed a short sale in March 2010. He later
ran his information through Desktop Underwriter, which
indicated that he had executed a prior foreclosure. When he
applied for a new mortgage, the bank used Freddie Mac’s
(which is distinct from Fannie Mae) underwriting software,
and it identified a short sale, not a foreclosure. The bank
originated this loan because it understood that Shaw had
experienced a prior short sale, not a foreclosure.

    Coke executed a short sale in 2011. The next year, he
obtained a mortgage from a bank that used an underwriting
system other than Desktop Underwriter, and that software
correctly identified this short sale. In 2013, the bank
attempted to underwrite a different mortgage using Desktop
      SHAW V. EXPERIENCE INFORMATION SOLUTIONS               9

Underwriter, which identified a possible foreclosure. Coke
eventually received a loan from the bank once it recognized
that Experian coded the account as a short sale, but he alleges
that the loan had a higher interest rate, and this caused him
stress and embarrassment.

    Rydman executed a short sale in June 2011. In 2013, he
applied for a new mortgage, and when the prospective lender
used the Desktop Underwriter software, it identified a
possible foreclosure, and his loan application was denied.
He applied for another mortgage the following year, and
received it because the lender did not use Fannie Mae’s
Desktop Underwriter, and did not identify a potential
foreclosure in his credit history. He alleges that the delay in
obtaining a new mortgage caused him approximately
$55,000 in damages.

    Between 2012 and 2013, each Appellant received a copy
of his Experian consumer disclosure. Each subsequently
disputed Experian’s reporting of his prior short sales, and
Experian responded to each dispute in 2013.

    In early 2013, the CRAs approved a new short sale code,
which Experian implemented. In late 2013, Fannie Mae also
updated its software to distinguish applicants that had
executed short sales from those that had endured
foreclosures. In 2014, Fannie Mae further refined Desktop
Underwriter to identify foreclosures when there is a MOP
code of 8 or foreclosure-related remarks code, and short
sales when there are specific short sale-related remarks
codes.

V. Procedural History

   After receiving Experian’s responses to their disputes,
Appellants filed this putative class action in June 2013
10    SHAW V. EXPERIENCE INFORMATION SOLUTIONS

against Wells Fargo, CitiMortgage, and Experian for
violations of the FCRA. Following the stipulated dismissal
of Wells Fargo and CitiMortgage, Appellants filed a second
amended complaint alleging three claims against Experian:
(1) a reasonable procedures claim pursuant to 15 U.S.C.
§ 1681e; (2) a reasonable reinvestigation claim pursuant to
15 U.S.C. § 1681i; and (3) a file disclosure claim pursuant
to 15 U.S.C. § 1681g. They requested damages pursuant to
15 U.S.C. § 1681n. This case was stayed pending the
Supreme Court’s resolution of Spokeo, Inc. v. Robins, 135 S.
Ct. 1892 (2015). After the Court issued its decision in
Spokeo, and the stay was lifted, Experian moved for
summary judgment.

    The district court granted summary judgment in favor of
Experian, and held:          First, Appellants’ reasonable
procedures and reasonable reinvestigation claims failed
because they had not shown that their credit reports were
inaccurate. Code combination 9-68 indicated a short sale,
not a foreclosure. Second, Appellants’ file disclosure claim
failed because they did not articulate what information
Experian failed to disclose to them. Third, Appellants failed
to establish that Experian willfully violated the FCRA
pursuant to 15 U.S.C. § 1681n. Appellants timely appealed.

               STANDARD OF REVIEW

    We have jurisdiction over this appeal pursuant to
28 U.S.C. § 1291. We review de novo a district court’s grant
of summary judgment. King v. County of Los Angeles,
885 F.3d 548, 556 (9th Cir. 2018). We may affirm the
district court on any ground supported by the record.
Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058, 1064
(9th Cir. 2016).
        SHAW V. EXPERIENCE INFORMATION SOLUTIONS                    11

                           ANALYSIS

    The FCRA arose out of “congressional concern over
abuses in the credit reporting industry.” Guimond v. Trans
Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995).
Congress thus enacted the FCRA in order “to ensure fair and
accurate credit reporting, promote efficiency in the banking
system, and protect consumer privacy.” Safeco Ins. Co. of
Am. v. Burr, 551 U.S. 47, 52 (2007). We apply a liberal
construction in favor of consumers when interpreting the
FCRA. Guimond, 45 F.3d at 1333.

I. Reasonable      Procedures                and        Reasonable
   Reinvestigation Claims

    15 U.S.C. § 1681e(b) defines the FCRA’s requisite
compliance procedures, and provides that: “Whenever a
consumer reporting agency prepares a consumer report it
shall follow reasonable procedures to assure maximum
possible accuracy of the information concerning the
individual about whom the report relates.” 3 Liability under
this reasonable procedures provision “is predicated on the
reasonableness of the credit reporting agency’s procedures
in obtaining credit information.” Guimond, 45 F.3d at 1333.
“[T]he reasonableness of a [CRA’s] procedures is ‘normally
a question for trial unless the reasonableness or
unreasonableness of the procedures is beyond question.’”
Cortez v. Trans Union, LLC, 617 F.3d 688, 709 (3d Cir.
2010) (quoting Sarver v. Experian Info. Sols., 390 F.3d 969,

    3
      A consumer, or credit, report is a CRA-prepared report that a CRA
issues to third parties for certain qualifying purposes. See 15 U.S.C.
§ 1681a(d)(1); Gillespie v. Trans Union Corp. (Gillespie I), 482 F.3d
907, 908 (7th Cir. 2007). The parties do not dispute that the reports
generated by Experian for use by Fannie Mae and other lenders are
consumer reports.
12    SHAW V. EXPERIENCE INFORMATION SOLUTIONS

971 (7th Cir. 2004)). To bring a § 1681e claim, the
“consumer must present evidence tending to show that a
[CRA] prepared a report containing inaccurate information.”
Guimond, 45 F.3d at 1333.

    15 U.S.C. § 1681i(a)(1)(A) outlines the scope of the
reinvestigation required “in [the] case of disputed accuracy,”
and provides, in part, that:

       [I]f the completeness or accuracy of any item
       of information contained in a consumer’s file
       at a [CRA] is disputed by the consumer and
       the consumer notifies the agency directly . . .
       of such dispute, the agency shall, free of
       charge, conduct a reasonable reinvestigation
       to determine whether the disputed
       information is inaccurate and record the
       current status of the disputed information, or
       delete the item from the file . . . before the
       end of the 30-day period beginning on the
       date on which the agency receives the notice
       of the dispute from the consumer . . . .

In other words, a CRA must conduct a free and reasonable
reinvestigation within thirty days of a consumer informing
the CRA of disputed information. See id. However, what
constitutes a “reasonable reinvestigation” will vary
depending on the circumstances of the case. See Gorman v.
Wolpoff & Abramson, LLP, 584 F.3d 1147, 1160 (9th Cir.
2009). Moreover, although § 1681i “does not on its face
require that an actual inaccuracy exist,” we, as with § 1681e
claims, “have imposed such a requirement.” Carvalho v.
Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010).
Requiring an inaccuracy, even absent an express statutory
mandate, is consistent with the FCRA’s purpose “to protect
      SHAW V. EXPERIENCE INFORMATION SOLUTIONS             13

consumers from the transmission of inaccurate information
about them.” Id. (quoting Gorman, 584 F.3d at 1157); see
15 U.S.C. § 1681.

    Thus, to sustain either a § 1681e or a § 1681i claim, a
consumer must first “make a ‘prima facie showing of
inaccurate reporting’” by the CRA. Carvalho, 629 F.3d at
890 (quoting Dennis v. BEH–1, LLC, 520 F.3d 1066, 1069
(9th Cir. 2008)); see Guimond, 45 F.3d at 1333 (“In order to
make out a prima facie violation under § 1681e(b), a
consumer must present evidence tending to show that a
[CRA] prepared a report containing inaccurate
information.”). Here, because Appellants have not made
such a showing, we need not consider the reasonableness of
Experian’s procedures or reinvestigation efforts, and
Appellants’ § 1681e and § 1681i claims fail.

    We first clarified the meaning of “inaccurate” for
purposes of the FCRA in Gorman. There, we held that
information is inaccurate for purposes of 15 U.S.C. § 1681s-
2(b) where it either is “patently incorrect” or is “misleading
in such a way and to such an extent that it can be expected
to adversely affect credit decisions.” 584 F.3d at 1163
(quoting Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890,
895 (5th Cir. 1998)). Consistent with “the maxim of
statutory construction that similar terms appearing in
different sections of a statute should receive the same
interpretation,” United States v. Nordbrock, 38 F.3d 440,
444 (9th Cir. 1994), we apply the same understanding of
“inaccurate” in analyzing § 1681e and § 1681i claims. See,
e.g., Carvalho, 629 F.3d at 890 (extending Gorman’s
definition of “inaccurate” to the California Consumer Credit
Reporting Agencies Act and citing with approval the holding
in Chiang v. Verizon New England Inc., 595 F.3d 26, 37 (1st
14    SHAW V. EXPERIENCE INFORMATION SOLUTIONS

Cir. 2010), that § 1681i “imposes essentially the same
obligation” to prove data is “inaccurate” as § 1681s-2(b)).

    The only purported inaccuracy to which Appellants
plausibly point is Experian’s reporting of Appellants’ prior
short sales. Because Experian has shown that it reported
Appellants’ short sales using code combination 9-68, we
must determine whether this manner of reporting was either
“patently inaccurate” or “misleading.”

    We hold that it was not. First, we conclude that reporting
Appellants’ short sales using code combination 9-68 was not
“patently incorrect.” Neither party argues that this code
combination does not represent a short sale, and we find no
evidence in the record to that effect.

     The closer question, and the one on which Appellants
rest much of their case, is whether Experian’s reporting of
Appellants’ short sales using code combination 9-68 was
misleading. We conclude that it was not. Under this test,
imprecision alone does not render a CRA’s conduct
actionable.      Rather, the CRA’s reporting must be
“misleading in such a way and to such an extent that it
[could] be expected to adversely affect credit decisions.”
Gorman, 584 F.3d at 1163 (quoting Sepulvado, 158 F.3d at
895); see also Saunders v. Branch Banking & Tr. Co.,
526 F.3d 142, 148 (4th Cir. 2008) (“[A] consumer report that
contains technically accurate information may be deemed
‘inaccurate’ if the statement is presented in such a way that
it creates a misleading impression.”).

    That standard was not met here. Appellants argue that
Experian’s reporting of Appellants’ short sales was
misleading because Experian’s use of “catchall code 9” in
the lead payment history spot caused Fannie Mae to treat the
short sales as potential foreclosures. However, this
       SHAW V. EXPERIENCE INFORMATION SOLUTIONS                        15

argument fails to consider that Experian reported
Appellants’ short sales with code combination 9-68.
Account status code 68 automatically inserts 9 into the lead
payment history spot, signifying that the account is
“SETTLED” and “legally paid in full for less than the full
balance.” This is the very definition of a short sale.
Moreover, Appellants point to no authority suggesting that
the inclusion of language describing what happens in a short
sale, as opposed to the exact term “short sale,” is so
misleading as to constitute a FCRA violation. Appellants
are correct that the statute refers to “maximum possible
accuracy,” not merely technical accuracy. 4 See 15 U.S.C.
§ 1681e(b). But this does not relieve Appellants of the
burden to prove that the inaccuracy is “misleading in such a
way and to such an extent that it can be expected to adversely
affect credit decisions.” Carvalho, 629 F.3d at 890 (quoting
Gorman, 584 F.3d at 1163).

   We find persuasive the reasoning of a recent district
court decision from our circuit addressing this very issue. In
Banneck v. HSBC Bank USA, N.A., the plaintiff executed a
short sale and Experian reported it with code combination 9-
68. No. 15-CV-02250-HSG, 2016 WL 3383960, at *1, *3–
4 (N.D. Cal. June 20, 2016). The plaintiff applied for a
subsequent mortgage loan, and the lender ran the plaintiff’s

     4
        Appellants rely heavily on Koropoulos v. Credit Bureau, Inc.,
734 F.2d 37 (D.C. Cir. 1984), arguing that we have adopted it in full and
that it necessarily compels us to decide this case in their favor. However,
we are not bound by Koropoulos. Far from adopting it in full, we have
quoted it parenthetically only a handful of times, and only in support of
the unremarkable definition of “inaccurate.” See Gorman, 584 F.3d at
1163; see also Drew v. Equifax Info. Servs., LLC, 690 F.3d 1100, 1108
(9th Cir. 2012). We find no reason to expand our adoption of some of
the reasoning of Koropoulos, nor would doing so necessarily decide this
case in Appellants’ favor.
16       SHAW V. EXPERIENCE INFORMATION SOLUTIONS

application through Desktop Underwriter, which it had
licensed from Fannie Mae. Id. at *4. The search triggered a
“Refer with Caution” recommendation due to payment
history grid code 9. Id. The district court reasoned that the
plaintiff “has produced no evidence that Experian reported
his short sale as anything other than a short sale.” Id. at *6.
Notwithstanding the use of payment history grid code 9,
which has multiple meanings, Experian’s reporting was not
misleading because it “clarifie[d] which credit event [was]
actually being reported with an undisputedly clear additional
code”—account status code 68. Id. at *7. Accordingly, the
district court granted summary judgment in favor of
Experian due to a lack of inaccurate reporting. Id. at *7–8.

     We are not swayed by Appellants’ attempts to
distinguish Banneck by arguing that account status code 68
is not “an undisputed clear additional code” for a short sale
here. See id. (“Experian’s simultaneous reporting of the
numerical code ‘68,’ which no one disputes refers only to a
short sale, . . . is dispositive in favor of Experian.”).
Appellants point to no evidence supporting this argument.
To the contrary, Experian’s technical manual
unambiguously indicates that a status code of 68 means
“Account legally paid in full for less than the full balance.”
Industry experts agree that this is the definition of a short
sale. Indeed, even Appellants’ complaint acknowledges this
is a definition of a short sale. Moreover, the record citations
on which Appellants rely reflect concerns only about the
lack of clarity in Metro 2 reporting, not Experian’s
reporting. 5

     5
       Appellants point to the Metro 2 special comment code “AU,”
which has the same meaning as account status code 68—“legally paid in
full for less than the full balance.” However, code “AU” is part of the
       SHAW V. EXPERIENCE INFORMATION SOLUTIONS                    17

    Furthermore, even if code combination 9-68 could stand
for other derogatory events and thereby be “misleading,”
that alone would not render Experian’s reporting actionable.
The reporting must be “misleading in such a way and to such
an extent that it can be expected to adversely affect credit
decisions.” See Gorman, 584 F.3d at 1163 (emphasis added)
(quoting Sepulvado, 158 F.3d at 895); see also 15 U.S.C.
§§ 1681a(k)(1), 1691(d)(6) (defining adverse action). In this
case, classifying a short sale as a foreclosure was the only
derogatory event that could have adversely affected credit
decisions because it caused various lenders to require that
borrowers wait seven, not two, years before obtaining a new
loan. See Gorman, 584 F.3d at 1163; see also Williams-
Steele v. TransUnion, 642 F. App’x 72, 73 (2d Cir. 2016)
(affirming dismissal of FCRA claims where “inaccuracies in
[plaintiff’s] credit reports [] had no bearing on her credit-
worthiness”).

    Here, there is no evidence that code combination 9-68
could have represented a foreclosure. When Experian codes
foreclosures, it uses a code combination of 8-94, meaning
“[c]reditor [g]rantor reclaimed [the] collateral to settle
defaulted mortgage.” And a foreclosure does not occur
where a mortgage account is “legally paid in full for less than
the full balance” as occurs with a short sale. Evidence that
Fannie Mae employees have, in the past, seen foreclosures
coded with lead payment history code 9 fails to recognize
that our inquiry is whether code combination 9-68 could
represent a foreclosure.

Metro 2 system that furnishers use to report to CRAs, not a value that
Experian uses in its credit reports. Because Experian does not report
code “AU” in its credit reports, code “AU” cannot be classified as an
inaccuracy in Experian’s credit reports.
18    SHAW V. EXPERIENCE INFORMATION SOLUTIONS

    Certainly, Fannie Mae’s treatment of code 9 on
Appellants’ accounts as a possible foreclosure could have
adversely affected credit decisions when Appellants sought
new mortgages. But this does not render Experian’s
reporting misleading. Fannie Mae conceded that it knew
that, by treating accounts with code 9 as a foreclosure, it was
“necessarily capturing accounts that [were] not actually
foreclosures.” Thus, the record before us indicates that the
inaccurate reporting of Appellants’ short sales was due to
Fannie Mae’s mistreatment of Experian’s coding, not
Experian’s own inaccuracies.           Appellants introduce
evidence that there was “confusion and complaints about
code 9,” but can point to no other subscribers or
underwriting software that could not identify a short sale
from code combination 9-68.

    Appellants also contend that Experian’s reporting was
misleading because Experian knew that Fannie Mae was
misreading its technical manuals and did not act on this
knowledge. But Appellants cite no case law suggesting that
Experian must amend its reporting system when a subscriber
disregards its technical manuals in order to avoid liability,
and we are aware of none. Nor would such a rule better
achieve the purposes of the FCRA. Experian provides credit
reports to approximately 15,000 users. The FCRA does not
suggest that Experian should be liable for the misconduct of
one of those 15,000 subscribers, even if that subscriber is as
well known as Fannie Mae. Nor should Experian necessarily
be required to amend its coding to curb a single subscriber’s
misconduct when all 14,999 other subscribers are apparently
accurately reading its manuals.

    In sum, Appellants fail to point to any inaccuracies on
their credit reports. Because they fail to meet this threshold
burden, we need not consider whether Experian had
      SHAW V. EXPERIENCE INFORMATION SOLUTIONS              19

reasonable     procedures   or     conducted      reasonable
reinvestigations when Appellants disputed their credit
information. We therefore affirm the district court’s grant of
summary judgment with regard to Appellants’ reasonable
procedures and reasonable reinvestigation claims.

II. Failure to Disclose Claim

    15 U.S.C. § 1681g(a) provides, in part, that “[e]very
consumer reporting agency shall, upon request, . . . clearly
and accurately disclose to the consumer: . . .[a]ll information
in the consumer’s file at the time of the request . . . .” A
consumer’s file includes “all information on the consumer
that is recorded and retained by a [CRA] that might be
furnished, or has been furnished, in a consumer report on that
consumer.” Cortez, 617 F.3d at 711–12 (quoting Gillespie
I, 482 F.3d at 909). Appellants offer several theories in
support of their claim that Experian failed to comply with
§ 1681(g), all of which fail for the reasons that follow.

    First, Appellants argue Experian’s consumer disclosures
violated § 1681g(a)(1) because Experian placed the
designation “CLS” (Closed) in the lead spot on the payment
history grid on each consumer disclosure, instead of one of
the code 9 statuses. This argument paints an incomplete
picture of Experian’s reporting. Code combination 9-68
means the account’s status is “settled,” with a special
comment of “-Acct legally paid in full for less than the full
balance.” Experian reported this same information in
Appellants’ consumer disclosures: Their accounts had the
status “[p]aid in settlement” with a creditor’s statement of
“[a]ccount legally paid in full for less than full balance.”

    Appellants argue that because the status category on a
consumer disclosure (“Paid in settlement”) is a separate
category from the lead digit in the payment history grid on a
20    SHAW V. EXPERIENCE INFORMATION SOLUTIONS

credit report, these categories serve different purposes.
However, Appellants cite to neither portions of the record
nor guiding case law supporting this position. Our inquiry
here is whether the disclosure is “understandable to the
average consumer,” and it is unclear to us how the specific
placement of “[p]aid in settlement” on the consumer
disclosure could affect a consumer’s comprehension. See
Gillespie v. Equifax Info. Servs., LLC, No. 05 C 138,
2008 WL 4316950, at *6 (N.D. Ill. Sept. 15, 2008)
(describing the holding of Gillespie v. Equifax Info. Servs.,
LLC (Gillespie II), 484 F.3d 938 (7th Cir. 2007)). To the
contrary, Experian complied with § 1681(g) because it
provided Appellants with “[a]ll information in [their] file[s]
at the time of the[ir] request[s]” in a form that was both
“clear[] and accurate[].” See 15 U.S.C. § 1681g(a).

    Second, Experian is not required to report the actual code
9 in a consumer disclosure. Indeed, requiring Experian to
provide its proprietary coded data in a consumer disclosure
would contradict § 1681g(a)’s requirement that the
disclosure be “clear.” A consumer who received a disclosure
with code 9 on it would likely not be able to “compare the
disclosed information from the credit file against the
consumer’s personal information in order to . . . determine
the accuracy of the information set forth in her credit file”
because the average consumer would not know what code 9
means. See Gillespie II, 484 F.3d at 941. In order for a
consumer to understand code 9, Experian would have to
report account status code 68 and release its complicated
technical manual, which would further confuse
unsophisticated consumers. Thus, while disclosing code 9
would be “accurate,” it would no longer be “clear” and
comprehensible to the average consumer.
       SHAW V. EXPERIENCE INFORMATION SOLUTIONS             21

    Third, we reject Appellants’ argument that Experian
violated § 1681g(a)(1) because “there was a material
disconnect between the information displayed in
[Appellants’] consumer reports and the information
displayed in [Appellants’] consumer disclosures . . . due to
the presence of the catchall code 9.” This is, in essence, a
repetition of Appellants’ arguments misinterpreting
Experian’s coding. While lead payment history code 9 can
represent various derogatory statuses, account status code 68
further clarifies the account’s status and the specific
derogatory event attached to it.

    We also note that Experian is not required to report that
Fannie Mae mishandled its data. Experian is only required
to report “information on the consumer that is recorded and
retained by [Experian] . . . in a consumer report.” Cortez,
617 F.3d at 711 (quoting Gillespie I, 482 F.3d at 909).
Fannie Mae’s misreading of lead payment code 9 is not
information retained by Experian in any credit report.
Therefore, it falls outside the bounds of a “file” for purposes
of § 1681g(a).

    Appellants received complete copies of their consumer
reports. They are not entitled by the FCRA to information
that is not in their report, and they fail to identify what
information Experian improperly excluded from its
disclosures. We therefore affirm the district court’s grant of
summary judgment with regard to Appellants’ failure to
disclose claim.

III.    Willfulness Pursuant to 15 U.S.C. § 1681n

    As we conclude that Experian did not violate the FCRA,
Appellants’ 15 U.S.C. § 1681n claim must fail. Yet even
assuming that Experian violated the FCRA, Appellants fail
to show that any violation by Experian was willful. To
22    SHAW V. EXPERIENCE INFORMATION SOLUTIONS

recover statutory damages for a violation of the FCRA,
Appellants must show that Experian willfully failed to
comply with the statute. See 15 U.S.C. § 1681n(a); Safeco,
551 U.S. at 56–57. A willful violation of the FCRA occurs
where a defendant knowingly or recklessly violated the
FCRA. Safeco, 551 U.S. at 57.

    Recklessness is an objective standard. See id. at 68–69.
A defendant acts in reckless disregard when its action both
is “a violation under a reasonable reading of the statute’s
terms” and “shows that the company ran a risk of violating
the law substantially greater than the risk associated with a
reading that was merely careless.” Id. at 69.

    As to Appellants’ first two claims, there was no statute,
CFPB guidance, or case law that “might have warned
[Experian] away from the view it took” or informed
Experian that its approach to reporting short sales was
objectively unreasonable. See id. at 70. To the contrary, the
CFPB informed Experian that it had investigated the short
sale-foreclosure problem and discovered that the underlying
problem was not due to inaccurate reporting by furnishers or
CRAs. This agency guidance suggests Experian’s conduct,
even if it were a violation of the FCRA, was not objectively
unreasonable and therefore not reckless. See id. at 70 &
n.20.     While the CFPB “essentially rescinded” this
memorandum, it did not inform Experian of this change in
its position. Therefore, Experian’s only guidance was the
prior CFPB memo.

   As previously discussed, a district court has agreed with
Experian’s position regarding the accuracy of its reporting.
See Banneck, 2016 WL 3383960, at *6. Admittedly,
Banneck was decided after this litigation began and therefore
Experian could not have relied upon its reasoning. But we
cannot conclude that Experian’s interpretation was
      SHAW V. EXPERIENCE INFORMATION SOLUTIONS             23

objectively unreasonable when it relied on the guidance of
its regulatory agency and at least one district court has
subsequently agreed with its interpretation of the FCRA. See
Safeco, 551 U.S. at 70 n.20 (“Where, as here, the statutory
text and relevant court and agency guidance allow for more
than one reasonable interpretation, it would defy history and
current thinking to treat a defendant who merely adopts one
such interpretation as a knowing or reckless violator.”).

     Appellants similarly fail to show willfulness as to their
failure to disclose claim. Even if Experian had violated
§ 1681g, we cannot say that Experian acted in an objectively
unreasonable manner. Experian’s decision not to list code 9
in its consumer disclosures was not objectively unreasonable
because the only relevant guidance dictated that consumers
are entitled to “complete copies of their consumer reports,
not their entire files in whatever form maintained by the
CRA.” See Gillespie I, 482 F.3d at 909. Nor have
Appellants pointed to any authority indicating that it was
objectively unreasonable for Experian to include the same
information in credit reports and consumer disclosures but
in different fields or locations. We do not so conclude now.
Therefore, Appellants have failed to show willfulness by
Experian as required by 15 U.S.C. § 1681n.

                      CONCLUSION

   For the foregoing reasons, we affirm the district court’s
grant of summary judgment in favor of Experian.

   AFFIRMED.