NACBA and NCLC Enter Fair
Credit Reporting Arena
O
n September, 2, 2016, NACBA
and the NCLC joined forces to
file an amicus brief in a case
addressing credit reporting standards
under the FCRA. Abeyta v. Bank of
America, No. 16-15707 (9th Cir.).
Ginny Abeyta filed for chapter 13
bankruptcy in June, 2010, and
successfully completed her plan in April,
2014. In October, 2014, she requested
her credit report and found that Bank
of America had reported her debt as
“past due” as of July, 2010, and in
“major delinquency” as of August,
2010. There was no mention of her
successful chapter 13 bankruptcy.
She requested reinvestigation of
the debt and the new credit report
contained the same inaccuracies.
She then filed suit against Bank
of America as the “furnisher” of
inaccurate information alleging
violation of the Fair Credit Reporting
Act (FCRA), 15 U.S.C. 1681–
1681x. In dismissing Ms. Abeyta’s
complaint, the district court found
the reported information to be
“technically correct” and therefore
not actionable under the FCRA.
In the amicus brief, NACBA and the
NCLC argue that the information
reported by Bank of America was
misleading and, therefore inaccurate,
because it made no mention of the
bankruptcy and failed to list the current
amount owed on the debt as “zero.”
Section 1681-s-2(b) of the FCRA
mandates that a furnisher of information
to a CRA correct inaccuracies upon
notification of those errors by the debtor.
In the brief, amici argue that Bank of
America failed to adhere to direction by
the Federal Trade Commission which
established guidelines for interpretation
of the FCRA under which “CRAs [must]
report a zero balance to reflect that a
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CONSUMER BANKRUPTCY JOURNAL
consumer is no longer liable for debt
discharged under a bankruptcy filing.”
The brief also argues that Bank
of America failed to comply with
industry standards set forth by the
Consumer Data Industry Association’s
(“CDIA”) Metro 2® Format. Like the
FTC guidelines, under the Metro
2® Format, a debt that has been
discharged in bankruptcy should
be listed with a current balance of
of America provided was “technically
accurate.” Amici argue that a “report
can be ‘inaccurate’ if it is either
‘patently inaccurate’ or ‘because it is
misleading to such an extent that it
can be expected to adversely affect
credit decisions.’” Moreover, furnishers
of information to the CRA, as the
entities with best access to accurate
information, are held to a higher
standard of accuracy than the CRA.
Here, the report indicates that Ms.
The brief also argues that
Bank of America failed to
comply with industry standards
set forth by the Consumer
Data Industry Association’s
(“CDIA”) Metro 2® Format.
zero, current monthly payments of
zero and amount past due of zero.
While the reporting format provided
by Metro 2® is not legally binding, it
has been widely accepted within the
credit reporting industry by CRAs,
major creditors and debt collectors as
setting out the appropriate reporting
standards. Failure to conform to the
guidelines may be considered by courts
addressing FCRA compliance. In this
case, Bank of America failed to comply
with the Metro 2® Format directives
and failed to correct the inaccurate
reporting
after
reinvestigation.
The brief takes issue with the district
court’s finding that Bank of America is
not liable under the FCRA because,
in fact, the debt had not been paid
and, therefore, the information Bank
Fall 2016
Abeyta was liable on a debt that had,
in fact, been discharged. Therefore,
the information provided by Bank of
America was inaccurate. By turning
a blind eye to the misleading credit
report, the district court undermined
the fresh start Ms. Abeyta had earned
by successfully completing her plan.
The brief argues that it was the province
of the finder of fact to determine whether
the information Bank of America
provided to the CRA was accurate.
Thanks go out to Joshana McVeigh for
authoring the brief.
Abeyta NACBA Amicus Sept 2016
National Association of Consumer Bankruptcy Attorneys