... Although Baker raises several claims against Capital One, a central complaint for Baker is that Capital One does not report its cardholders’ credit limits. Baker has argued that a credit card company’s failure to report its cardholders’ credit limits leads to a reduction in the cardholders’ FICO credit scores. As a result, users of credit information employing FICO credit scores in their decisionmaking — such as insurance companies determining what rate to charge, e.g., Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1089 (9th Cir. 2006) make decisions unfavorable or less favorable to such cardholders. Baker’s evidence suggests that, up to this point at least, she is correct. One of the “most important factors” used in determining a consumer’s FICO credit score is the “proportion of balances to credit limits” in their revolving accounts. (Doc. # 137 Ex. M-1 at 3 (Equifax “myFICO” score report and explanation).) As argued by Baker and strongly suggested by the evidence, if a credit card company has not reported its cardholder’s credit limit, FICO score generators substitute the cardholder’s “high credit” amount in place of the credit limit when calculating this important factor. (See id. at Ex. M-1 at 3:5.) The high credit” amount, which is the largest amount the cardholder has utilized in any one cycle from the creditor, is generally lower than the cardholder’s credit limit (except, of course, for cardholders that at some time have exceeded their permitted credit limit). The resultingly higher proportion of balance to credit limit resulting where the “high credit” amount is used negatively affects the cardholder’s overall FICO credit score. Despite this arbitrarily harmful result, it appears that Capital One continues to report its cardholders high credit” amounts but not their credit limits. ...
... Rather, the legal duty of creditors to report information in response to disputes is governed by 15 U.S.C. § 1681s-2(b), which includes no specific requirement that credit limits be reported by creditors who do not ordinarily do so. While other statutes, regulations or caselaw may or may not require the reporting of certain specific items of information such as credit limits, Baker has waived her rights under such authority by failing to present it here. See Arai v. Am. Bryce Ranches, Inc., 316 F.3d 1066, 1070 n.4 (9th Cir. 2003). Capital One’s motion for summary judgment on this claim is therefore granted. [emphasis added]
Of course I objected to the motion for summary judgment by quoting the FCRA:
(b) Duties of Furnishers of Information upon Notice of Dispute
(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis; and ... [emphasis added]
Is Judge Wake right?
Did Congress intend for "complete" to mean that creditors can report or NOT report whatever they want in order to damage their customers credit scores so they can't get accounts with better terms and rates from competitors?
Last edited on Thu Dec 7th, 2006 02:15 am by Christine