FCRA covers factual inaccuracies, doesn’t resolve legal disputes

February 17, 2023

CUNA joined with other financial services organizations in an amicus brief to clarify that the Fair Credit Reporting Act (FCRA) requires furnishers and credit reporting agencies (CRA) to investigate and remove factually inaccurate information, but not to correctly resolve all legal disputes about a debt. The amicus brief was filed in the U.S. Court of Appeals for the 11th Circuit.

The consolidated lawsuit involves two plaintiffs suing Holiday Inn Club Vacations, Inc., after ceasing payments on timeshares. Holiday Inn reported the non-payment to CRAs, and the plaintiffs sued Holiday Inn under the FCRA for furnishing “inaccurate” information about their debts.

“The text, structure, history, and purpose of the FCRA all demonstrate that the statute requires furnishers and CRAs to investigate and verify factual accuracy, not assess or resolve legal disputes,” the brief reads.

The brief argues that the statute requires CRAs to “determine whether” disputed information is inaccurate.

“CRAs and furnishers can readily ‘determine’ and ‘find’ whether disputed information is factually error-free,” it reads. “But only courts of law have the capacity to conclusively ‘determine’ or ‘find’ that information in a credit file is legally valid.

“The FCRA’s structure and purpose reinforce the natural reading of the statutory text,” it adds. “Congress explained that the statute was designed to ensure ‘fair and accurate credit reporting’… Accordingly, the FCRA’s provisions work together to ensure that the information in a consumer’s credit report accurately represents her creditworthiness.”

CUNA filed briefs with similar arguments in the 2nd Circuit Court of Appeals and another 11th Circuit Court of Appeals lawsuit last year.