Eleventh Circuit Highlights Consumer Burden of Establishing Lender Unreasonableness to Support Will’s Claim under FCRA | Burr & Forman
On July 6, 2021, the Eleventh Circuit issued a per curiam notice asserting the Southern District of Alabama’s entry into a summary judgment in favor of the lender on a plaintiff’s claim under the Fair Credit Reporting Act (” FCRA ”), concluding that the district court did not err in dismissing the claim for willful breach of the FCRA because the claimant failed to establish that the lender’s interpretation of its obligations under the law was objectively unreasonable.
In Ajomale v. Quicken Loans Inc., –– Fed Appx. ––, 2021 WL 2799939 (July 6, 2021), the complainant claimed that Quicken Loans both willfully and negligently violated the FCRA by failing to provide a credit score disclosure (“CSD”) after using its information credit score in conjunction with a joint mortgage application initiated by her non-party husband. In affirming the findings of the lower court, the Eleventh Circuit held that a defendant does not “recklessly” violate the FCRA unless its interpretation of the FCRA’s requirements is “objectively unreasonable” under the law itself. or under other applicable guidelines described by courts or agencies such as the Federal Trade Commission (“FTC”).
FCRA Section 1681 (g) requires a lender to provide a CSD to a consumer whenever their consumer credit score is used as part of a “consumer initiated or sought” loan application. . On this basis, the Eleventh Circuit held that Quicken Loans‘ interpretation of this provision in determining the issuance of a CSD was not required in view of the facts at issue here – in which the complainant’s husband, and not the complainant herself initiated the loan application in question. –– was not objectively unreasonable, as the wording of the law does not make it clear who is entitled to CSD in such a scenario, and the FTC has not issued any guidance to clarify the issue. In a footnote, the Court acknowledged the claimant’s assertion that the loan request was a “joint” request, but nevertheless declined to find that the claimant’s interpretation of Section 1681 (g) requiring the issuance of a CSD in this case was the only objectively reasonable interpretation of this language.
The court was also not persuaded by the plaintiff’s position that the district court erred in excluding certain internal electronic correspondence between employees of Quicken Loans regarding its FCRA compliance measures. The Eleventh Circuit ruled with respect to this argument: “If the consumer fails to establish that the defendant’s reading of the FCRA was objectively unreasonable, we need not consider the evidence of the defendant’s subjective motives. . “
The Eleventh Circuit also found that the plaintiff did indeed drop its negligence claim under the FCRA after failing to substantially address and in particular the claim in its response to Quicken Loans’ motion for summary judgment.
While the question of what is considered an “unreasonable” interpretation of the FCRA remains a factual investigation in the courts, the Ajomale The ruling provides a useful framework for limiting unfettered claims of willful FCRA violations when a lender has acted reasonably.