DALY v. NORTHWEST SAVINGS BANK
2:11-cv-00911
| W.D. Pa. | Mar 20, 2013Background
- Daly filed an amended complaint alleging FCRA §1681g(g) violations against Northwest for failure to disclose her credit score and failure to provide notice in a prequalification context.
- Daly sought prequalification for a mortgage after selling her home and renting temporarily, visiting Northwest and other banks in July 2010.
- Walker at Northwest prepared a prequalification using Daly’s income data; Northwest obtained a CBCInnovis credit report and Daly’s credit score.
- Northwest sent Daly a letter dated July 27, 2010 stating the prepaid pre-approval could not be issued due to negative credit report items, and included a Notice of Action Taken and an ECOA notice.
- Daly’s application process did not culminate in a specific property-secured loan, yet Northwest denied prequalification based on the credit report.
- Daly contends Northwest failed to provide the required credit score disclosure and notice under §1681g(g)(1)(A)(i)-(ii).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1681g(g) applies to prequalification | Daly argues prequalification fits §1681g(g)(1) as ‘in connection with an application.’ | Northwest contends §1681g(g) applies only to completed loan applications for a specific property. | Genuine issue of material fact; prequalification falls within §1681g(g)(1). |
| Whether Northwest willfully violated §1681g(g) | Willfulness shown by disregard of the statute’s requirements; damages may be statutory. | Construction of §1681g(g) was objectively reasonable; no willful violation. | Genuine issue of material fact; willfulness to be decided by jury. |
| Interpretation of 'in connection with' in §1681g(g)(1) | Phrase broad; includes prequalification and related use of credit score. | Phrase should be read narrowly to refer to a loan application for a particular property. | Court adopts broad interpretation; extends protections to prequalification. |
Key Cases Cited
- Duncan v. Walker, 533 U.S. 167 (Supreme Court 2001) (closest statutory-interpretation principle: ordinary meaning of language)
- Perrin v. United States, 444 U.S. 37 (Supreme Court 1979) (words interpreted by ordinary, contemporary meaning)
- Rubin v. United States, 449 U.S. 424 (Supreme Court 1981) (statutory interpretation canon and remedial purpose)
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (Supreme Court 2007) (reckless standard for willfulness under a remedial statute)
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (liberal, remedial reading of FCRA provisions)
- Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (Supreme Court 1982) (statutory interpretation when language is unclear; legislative history considered)
- United States v. Loney, 219 F.3d 281 (3d Cir. N.J. 2000) (interpretation of broad phrases like 'in connection with')