Friday, September 28, 2007

Fair Credit Reporting Act - private cause of action eliminated

Meyers v. Freedom Credit Union - ED Pa. - September 21, 2007

There is no longer a private cause of action for the failure of a prospective creditor/lender to give a loan applicant who was denied credit the name, address and toll-free number of the credit reporting agency (CRA) whose report formed the basis, at least in part, of the denial of credit, as required by 15 USC sec. 1681m(a)(2)(A).

It is "beyond dispute" that there had been a private cause of action uner 15 USC secs. 1681n and 1681o for such failure -- until the enactment of a provision of the Fair and Accurate Credit Transaction Act (FACTA), P.L. 108-159, which amended the FCRA by, inter alia, eliminating a private cause of action for the conduct of which plaintiff complains. Under FACTA, such violations can now be enforced only by the relevant federal agencies and officials.

The court reached this conclusion by recognizing the "primacy of text and structure in statutory interpretation" and the decisions of "almost all" of the courts that have examined the issue, even while noting that the result was contrary to the structure, history and purpose of FACTA.

Somewhat ironically, however, the plaintiff in this case was able to recover, because her cause of action accrued before FACTA took effect.