Eleventh Circuit Emphasizes Consumer’s Burden of Establishing Lender’s Unreasonability to Sustain Willfulness Claim Under the FCRA

On July 6, 2021, the Eleventh Circuit issued a per curiam opinion affirming the Southern District of Alabama’s entry of summary judgment in the lender’s favor on a plaintiff’s claim under the Fair Credit Reporting Act (“FCRA”), therein finding that the district court did not err in dismissing the claim for willful violation of the FCRA because the plaintiff failed to establish that the lender’s interpretation of its obligations under the statute was objectively unreasonable.

In Ajomale v. Quicken Loans Inc., –– Fed Appx. ––, 2021 WL 2799939 (Jul. 6, 2021), the plaintiff claimed that Quicken Loans both willfully and negligently violated the FCRA by failing to provide a credit score disclosure (“CSD”) after using her credit score information in conjunction with an application for a joint mortgage loan initiated by her husband, a nonparty. In affirming the lower court’s findings, the Eleventh Circuit held that a defendant does not “recklessly” violate the FCRA unless its interpretation of the FCRA’s requirements was “objectively unreasonable” under the statute itself or under other applicable guidance outlined by the courts or agencies such as the Federal Trade Commission (“FTC”).

Section 1681(g) of the FCRA requires a lender to provide a CSD to a consumer whenever their consumer credit score is utilized in connection with a loan application “initiated or sought by a consumer.” On this basis, the Eleventh Circuit reasoned that Quicken Loans’ interpretation of this provision to determine issuance of a CSD was not required under the facts at issue here––in which the plaintiff’s husband, not the plaintiff herself, initiated the loan application in question––was not objectively unreasonable, as the statutory language does not make clear who is entitled to the CSD in such a scenario and the FTC has not issued any guidance to clarify the issue. In a footnote, the Court acknowledged the plaintiff’s contention that the loan application was a “joint” application but nevertheless declined to hold that the plaintiff’s interpretation of Section 1681(g) requiring the issuance of a CSD in this instance was the only objectively reasonable interpretation of this language.

The Court was similarly unpersuaded by the plaintiff’s position that the district court erred in excluding certain internal email correspondence among Quicken Loans employees regarding its FCRA compliance measures. The Eleventh Circuit held with respect to this argument: “If the consumer fails to establish that the defendant’s reading of the FCRA was objectively unreasonable, we have no need to consider evidence of the defendant’s subjective motives.”

The Eleventh Circuit also found that the plaintiff had effectively abandoned her negligence claim under the FCRA after failing to substantively and particularly address the claim in her response to Quicken Loans’ motion for summary judgment.

While the issue of what is considered an “unreasonable” interpretation of the FCRA remains a fact-specific inquiry before the courts, the Ajomale decision provides a helpful framework for limiting unfettered claims of willful violations of the FCRA where a lender has acted reasonably.

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