WASHINGTON v. CHRYSLER CAPITAL CORPORATION et al
Filing
78
MEMORANDUM. SIGNED BY HONORABLE JEFFREY L. SCHMEHL ON 9/8/21. 9/8/21 ENTERED AND COPIES E-MAILED.(er, )
Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 1 of 34
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
DEJA WASHINGTON,
Plaintiff,
v.
CIVIL ACTION
NO. 19-143
FEDLOAN SERVICING
Defendant.
MEMORANDUM
SCHMEHL, J.
/s/ JLS
SEPTEMBER 8, 2021
Plaintiff brought this action, claiming Defendant FedLoan Servicing
(“FedLoan”) violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s2(b) by reporting inaccurate and misleading information on her credit report and
by failing to conduct a good faith investigation into the allegedly inaccurate
reporting. 1 Presently before the Court is the motion of FedLoan for summary
judgment. For the reasons that follow, the motion is granted.
STANDARD OF REVIEW
A court shall grant a motion for summary judgment “if the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). An issue is “genuine” if
there is a sufficient evidentiary basis on which a reasonable jury could return a
verdict for the non-moving party. Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423
The Complaint also named Chrysler Capital Corp and TransUnion, LLC as Defendants, but the Plaintiff
has reached a settlement agreement with both.
1
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(3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
A factual dispute is “material” if it might affect the outcome of the case under
governing law. Id. (citing Anderson, 477 U.S. at 248).
Under Rule 56, the Court must view the evidence presented on the motion
in the light most favorable to the non-moving party. See Anderson, 477 U.S. at
255. However, “[u]nsupported assertions, conclusory allegations, or mere
suspicions are insufficient to overcome a motion for summary judgment.” Betts v.
New Castle Youth Dev. Ctr., 621 F.3d 249, 252 (3d Cir. 2010). The movant bears
the initial responsibility for informing the Court of the basis for the motion for
summary judgment and identifying those portions of the record that demonstrate
the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). Where the non-moving party bears the burden of proof on
a particular issue, the moving party’s initial burden can be met simply by “pointing
out to the district court that there is an absence of evidence to support the
nonmoving party’s case.” Id. at 325. After the moving party has met the initial
burden, the non-moving party must set forth specific facts showing that there is a
genuinely disputed factual issue for trial by “citing to particular parts of materials
in the record, including depositions, documents, electronically stored information,
affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or
other materials” or by “showing that the materials cited do not establish the
absence or presence of a genuine dispute.” Fed. R. Civ. P. 56(c).
Summary judgment is appropriate if the non-moving party fails to rebut by
making a factual showing “sufficient to establish the existence of an element
2
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essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Celotex, 477 U.S. at 322.
FACTS
The following facts, taken from FedLoan’s Undisputed Statement of Facts
(ECF 39-13), are not in dispute:
1. The Pennsylvania Higher Education Assistance Agency (“PHEAA”) is a
statutorily created instrumentality of the Commonwealth of Pennsylvania,
with its principal place of business in Harrisburg, Pennsylvania, which
conducts its federal student loan servicing activities under the business
name FedLoan. 24 P.S. §§ 5101 – 5199.9. (Answer and Affirmative
Defenses of Defendant FedLoan Servicing at ¶ 6.)
2. On June 21, 2007, Plaintiff signed and submitted a Federal Student Loan
Master Promissory Note to receive student loans under the Federal Family
Education Loan Program (“FFELP”).
3. Plaintiff received FFELP student loans pursuant to the Master Promissory
Note and federal student loans to finance her post-secondary education
from 2007 through 2012. (Deposition of Deja Washington, November 5,
2019, at p. 12:16-20, included within “Exhibit 1” to FedLoan’s Motion for
Summary Judgment.)
4. On June 17, 2016, Plaintiff signed and submitted a Federal Direct
Consolidation Loan Application and Promissory Note to consolidate her
student loans, including the FFELP loans and federal student loans Plaintiff
received to finance her education. (FedLoan’s Request for Admissions to
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Plaintiff at ¶ 4, and Federal Direct Consolidation Loan Application and
Promissory Note attached as Exhibit D, included within “Exhibit 7” to
FedLoan’s Motion for Summary Judgment.)
5. By letter dated July 30, 2016, FedLoan notified Plaintiff that the
consolidation of her student loans was completed, and identified the loans
that were included within her Direct Consolidation Loan. (FedLoan’s
response to Washington’s Request for Production of Documents, pp. 319–
321, included within “Exhibit 4” to FedLoan’s Motion for Summary
Judgment.)
6. Plaintiff’s Direct Consolidation Loan was disbursed on July 29, 2016, and
consisted of a subsidized portion with a balance of $25,882.29 and an
unsubsidized portion of $31,915.65, for a total amount of $57,797.94.
(FedLoan’s response to Washington’s Request for Production of
Documents, p. 321, included within “Exhibit 4” to FedLoan’s Motion for
Summary Judgment.)
7. . Upon Plaintiff’s Direct Consolidation Loan being disbursed by the
Department of Education (“DOE”), FedLoan began servicing Plaintiff’s
Direct Consolidation Loan. (FedLoan’s response to Washington’s Request
for Production of Documents, pp. 324-326, included within “Exhibit 4” to
FedLoan’s Motion for Summary Judgment.)
8. Plaintiff’s first payment due date on her Direct Consolidation Loan was
September 26, 2016. (FedLoan’s response to Washington’s Request for
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Production of Documents, p. 260, included within “Exhibit 4” to FedLoan’s
Motion for Summary Judgment.)
9. Plaintiff did not make the required payment on her Direct Consolidation
Loan by September 26, 2016. (FedLoan’s response to Washington’s
Request for Production of Documents, pp. 333-335, included within
“Exhibit 4” to FedLoan’s Motion for Summary Judgment.)
10. By letter dated October 19, 2016, FedLoan notified Plaintiff that she was
delinquent on her Direct Consolidation Loan, and requested that she make
payments to bring her loan current. (FedLoan’s response to Washington’s
Request for Production of Documents, pp. 333-335, included within
“Exhibit 4” to FedLoan’s Motion for Summary Judgment.)
11. Plaintiff did not make any payments on her Direct Consolidation Loan
subsequent to the October 19, 2016 letter. (FedLoan’s response to
Washington’s Request for Production of Documents, pp. 256-260, included
within “Exhibit 4” to FedLoan’s Motion for Summary Judgment.)
12. By letter dated December 3, 2016, FedLoan again notified Plaintiff that
she was delinquent on her Direct Consolidation Loan, and requested that
she make payments to bring her loan current. (FedLoan’s response to
Washington’s Request for Production of Documents, pp. 338-340,
included within “Exhibit 4” to FedLoan’s Motion for Summary Judgment.)
13. Also, by letter dated December 3, 2016, FedLoan notified Plaintiff that her
Direct Consolidation Loan would default on July 1, 2017, if no payments
were made, and again urged Plaintiff to make payments to bring her
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account current. (FedLoan’s response to Washington’s Request for
Production of Documents, pp. 341-343, included within “Exhibit 4” to
FedLoan’s Motion for Summary Judgment.)
14. Subsequent to Plaintiff’s Direct Consolidation Loan being disbursed on July
29, 2016, Plaintiff failed to make any payments on the loan. (FedLoan’s
response to Washington’s Request for Production of Documents, pp. 11171118, included within “Exhibit 4” to FedLoan’s Motion for Summary
Judgment at ECF 77-2, pp. 329-330.)
15. In February 2017, due to non-payment, Plaintiff’s Direct Consolidation Loan
became one hundred and twenty (120) days delinquent. (FedLoan’s
response to Washington’s Request for Production of Documents, p. 1117;
FedLoan’s Request for Admissions to Plaintiff at ¶ 5; Deposition of Deja
Washington, November 5, 2019, at p. 15:1-10, included within “Exhibits 1,
4, and 7” to FedLoan’s Motion for Summary Judgment.)
16. Beginning February 2017, FedLoan began reporting to the credit reporting
agencies Plaintiff’s Direct Consolidation Loan as being one hundred and
twenty (120) days delinquent. (FedLoan’s response to Washington’s
Request for Production of Documents, p. 1117, included within “Exhibit 4”
to FedLoan’s Motion for Summary Judgment at ECF 77-2, p. 329.)
17. On October 3, 2017, FedLoan submitted to the DOE a request to transfer
Plaintiff’s Direct Consolidation Loan due to non-payment on the loan.
(FedLoan’s response to Washington’s Request for Production of
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Documents, p. 140, included within “Exhibit 4” to FedLoan’s Motion for
Summary Judgment.)
18. On October 12, 2017, due to non-payment, Plaintiff’s Direct Consolidation
Loan charged off FedLoan’s servicing system, and was transferred to the
DOE. (FedLoan’s response to Washington’s Request for Production of
Documents, p. 140 – 141 (Activity Detail Screen); p. 1117 (FedLoan’s Credit
Reporting of Deja Washington), included within “Exhibit 4” to FedLoan’s
Motion for Summary Judgment at ECF 77-2, p. 329.)
19. For each month from February 2017 through September 2017, payments
on Plaintiff’s Direct Consolidation Loan were at least 120 days delinquent.
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 6, included
within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
20. At the time Plaintiff’s Direct Consolidation Loan transferred from FedLoan’s
servicing system to the DOE on October 12, 2017, payments on the loan
were at least 120 days delinquent. (FedLoan’s response to Washington’s
Request for Production of Documents, p. 1117, included within “Exhibit 4”
to FedLoan’s Motion for Summary Judgment at ECF 77-2, p. 330.)
21. Beginning in October 2017, due to Plaintiff’s Direct Consolidation Loan
charging off of FedLoan’s servicing system due to non-payment, FedLoan
began reporting the status of Plaintiff’s loan as “E – Zero balance and
current account,” with a status of “05–Account transferred,” a special
comment of “AT-account closed due to transfer,” and a payment rating of
“6-180 or more days past the due date.” (FedLoan’s response to
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Washington’s Request for Production of Documents, pp. 1117-1118,
included within “Exhibit 4” to FedLoan’s Motion for Summary Judgment at
ECF 77-2, pp. 329-330.)
22. Beginning in October 2017, Plaintiff’s credit report reflected her Direct
Consolidation Loan as having a zero ($0.00) current balance, and a zero
($0.00) past due balance to all three credit reporting agencies. (Plaintiff’s
response to FedLoan’s Requests for Admission at ¶¶ 1 and 2, and Credit
Reports of Deja Washington, included within “Exhibit 9” to FedLoan’s
Motion for Summary Judgment.)
23. By letter dated April 26, 2018, Plaintiff submitted a dispute regarding the
credit reporting of her Direct Consolidation Loan to TransUnion. (FedLoan’s
response to Washington’s Request for Production of Documents, p. 1177,
included within “Exhibit 4” to FedLoan’s Motion for Summary Judgment at
ECF 77-2, p. 389.) The letter stated, “[t]hese accounts are showing the
wrong status. It states that the account is currently past due but it cannot be
currently late. The balance clearly shows $0. Further, I think the accounts
were transferred which also means its impossible for it to be currently late
with this creditor. This is hurting my credit.” Id.
24. FedLoan received notice of Plaintiff’s credit dispute from TransUnion on
May 12, 2018 via an Automated Credit Dispute Verification (“ACDV”).
(FedLoan’s response to Washington’s Request for Production of
Documents, p. 1174, included within “Exhibit 4” to FedLoan’s Motion for
Summary Judgment at ECF 77-2 p.386). The ACDV contained two dispute
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codes:
“106-Disputes
present/previous
Account
Status/Payment
Rating/Account History. Verify Account Status, Payment Rating and
Account History” and “118-Disputes Current Balance and/or Amount Past
Due. Verify Current Balance or Amount Past Due.” Finally, the ACDV
requested that transfer of the account should be verified. Id.
25. FedLoan responded to the ACDV from TransUnion resulting from Plaintiff’s
indirect dispute on June 4, 2018. (FedLoan’s response to Washington’s
Request for Production of Documents, pp. 1174-1176, included within
“Exhibit 4” to FedLoan’s Motion for Summary Judgment at ECF 77-2, pp.
386-388.)
26. By letter dated May 7, 2018, Plaintiff submitted a dispute regarding the
credit reporting of her Direct Consolidation Loan to Equifax. (FedLoan’s
response to Washington’s Request for Production of Documents, p. 1192,
included within “Exhibit 4” to FedLoan’s Motion for Summary Judgment at
ECF 77-2, p. 404.)
27. FedLoan received notice of Plaintiff’s credit dispute from Equifax on May
16, 2018 via an ACDV. (FedLoan’s response to Washington’s Request for
Production of Documents, pp. 1189-1191, included within “Exhibit 4” to
FedLoan’s Motion for Summary Judgment at ECF 77-2, pp. 401-403.)
28. Within Plaintiff’s May 7, 2018 dispute, she indicated FedLoan’s reporting
included inaccurate information and requested that her ID be confirmed and
all Account Information be verified. (FedLoan’s response to Washington’s
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Request for Production of Documents, p. 1189, included within “Exhibit 4”
to FedLoan’s Motion for Summary Judgment at ECF 77-2, p. 401.)
29. FedLoan responded to the ACDV from Equifax resulting from Plaintiff’s
indirect dispute on June 4, 2018. (FedLoan’s response to Washington’s
Request for Production of Documents, p. 1189, included within “Exhibit 4”
to FedLoan’s Motion for Summary Judgment at ECF 77-2, p. 401.)
30. By April 28, 2018, Plaintiff’s credit history included at least 3 accounts with
lenders in her credit history in delinquent status, at least 5 accounts with
lenders in a derogatory status, and at least one account with a lender in
collection status. (Plaintiff’s response to FedLoan’s Requests for Admission
at ¶¶ 8-10, included within “Exhibit 8” to FedLoan’s Motion for Summary
Judgment.)
31. In September 2016, Plaintiff took out a loan or lease for an automobile with
a lender identified as “NISSN INF LT,” account number 2500771****.
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 11, included
within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
32. In January 2017, Plaintiff became delinquent on her loan with “NISSN INF
LT,” account number 2500771****. (Plaintiff’s response to FedLoan’s
Requests for Admission at ¶ 12, included within “Exhibit 8” to FedLoan’s
Motion for Summary Judgment.)
33. By April 2018, Plaintiff’s loan with “NISSN INF LT” was reported by
Transunion with a payment status of “Collection/Chargeoff,” by Experian
with a payment status of “Repossession,” and by Equifax with a payment
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status of “Collection/Chargeoff.” (Plaintiff’s response to FedLoan’s
Requests for Admission at ¶ 13, included within “Exhibit 8” to FedLoan’s
Motion for Summary Judgment.)
34. Plaintiff’s vehicle financed with a loan or lease from “NISSN INF LT,”
account number 2500771****, was repossessed as a result of her
delinquent payments. (Plaintiff’s response to FedLoan’s Requests for
Admission at ¶ 14; Deposition of Deja Washington, November 5, 2019, p.
56:11-18, included within “Exhibits 1 and 8” to FedLoan’s Motion for
Summary Judgment.)
35. In May 2016, Plaintiff took out a loan or lease for an automobile with a lender
identified as “NISSN INF LT,” account number 2500762****. (Plaintiff’s
response to FedLoan’s Requests for Admission at ¶ 15, included within
“Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
36. In December 2016, Plaintiff became delinquent on her loan or lease with
“NISSN INF LT,” account number 2500762****. (Plaintiff’s response to
FedLoan’s Requests for Admission at ¶ 16, included within “Exhibit 8” to
FedLoan’s Motion for Summary Judgment.)
37. By August 2019, Plaintiff’s loan with “NISSN INF LT,” account number
2500762****, was reported by TransUnion with a payment status of
“Involuntary repossession,” by Experian with a payment status of
“Involuntary repossession. Merchandise was taken back by credit
grantor/there may be a balance due,” and by Equifax with a payment status
of “Involuntary Repossession Auto.” (Plaintiff’s response to FedLoan’s
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Requests for Admission at ¶ 17, included within “Exhibit 8” to FedLoan’s
Motion for Summary Judgment.)
38. Plaintiff’s vehicle financed with a loan or lease from “NISSN INF LT,”
account number 2500762****, was repossessed due to her delinquent
payments. (Plaintiff’s response to FedLoan’s Requests for Admission at ¶
18, included within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
39. In December 2012, Plaintiff received credit for a credit card with
“CAPITALONE,” account number 51780578****. (Plaintiff’s response to
FedLoan’s Requests for Admission at ¶ 19, included within “Exhibit 8” to
FedLoan’s Motion for Summary Judgment.)
40. In February 2017, Plaintiff became delinquent on her payments for her
credit card with “CAPITALONE,” account number 51780578****. (Plaintiff’s
response to FedLoan’s Requests for Admission at ¶ 20, included within
“Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
41. By April 2018, Plaintiff’s credit card with “CAPITALONE,” account number
51780578****, was reported by TransUnion with a payment status of
“Collection/Chargeoff,” by Experian with a payment status of “Collection
Chargeoff,” and by Equifax with a payment status of “Collection Chargeoff.”
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 21, included
within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
42. In relation to Plaintiff’s credit card with “CAPITALONE,” account number
51780578****, Plaintiff’s Three Bureau Credit Report dated April 28, 2018,
lists comments from TransUnion of “Charged off as bad debt Canceled by
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credit grantor,” Experian of “Account has been closed due to inactivity.
Unpaid balance reported as a loss by the credit grantor,” and Equifax as
“Charged off account Accounts closed by credit grantor.” (Plaintiff’s
response to FedLoan’s Requests for Admission at ¶ 22, included within
“Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
43. In September 2016, Plaintiff was approved for a credit card with
“DISCOVERBANK,” account number 60110003****. (Plaintiff’s response to
FedLoan’s Requests for Admission at ¶ 23, included within “Exhibit 8” to
FedLoan’s Motion for Summary Judgment.)
44. In September 2018, Plaintiff became delinquent on her payments for her
credit card with “DISCOVERBANK,” account number 6011003****.
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 24, included
within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
45. Plaintiff’s
credit
card
with
“DISCOVERBANK,”
account
number
6011003****, was reported by TransUnion as delinquent for the months of
September 2018 through December 2018, by Experian for the months of
September 2018 through December 2018, and by Equifax for the months
of September 2018 to November 2018. (Plaintiff’s response to FedLoan’s
Requests for Admission at¶ 25, included within “Exhibit 8” to FedLoan’s
Motion for Summary Judgment.)
46. In August 2018, Plaintiff was approved for a credit card with
“CREDITONEBNK,”
account
number
13
444796240593****.
(Plaintiff’s
Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 14 of 34
response to FedLoan’s Requests for Admission at ¶ 26, included within
“Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
47. In November 2018, Plaintiff became delinquent on her payments for her
credit card with “CREDITONEBNK,” account number 444796240593****.
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 27;
Deposition of Deja Washington, November 5, 2019, p. 19:3-11, included
within “Exhibits 1 and 8” to FedLoan’s Motion for Summary Judgment.)
48. Plaintiff’s
credit
card
with
“CREDITONEBNK,”
account
number
444796240593****, was reported by TransUnion as delinquent for the
months of November 2018 and December 2018, was reported by Experian
as delinquent for the months of November 2018 and December 2018, and
was reported as delinquent by Equifax for the month of November 2018.
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 28, included
within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
49. In March 2018, Plaintiff received an installment loan with “LEAD BANK,”
account number 1166****. (Plaintiff’s response to FedLoan’s Requests for
Admission at ¶ 29, included within “Exhibit 8” to FedLoan’s Motion for
Summary Judgment.)
50. In August 2018, Plaintiff became delinquent on her payments for her
installment loan with “LEAD BANK,” account number 1166****. (Plaintiff’s
response to FedLoan’s Requests for Admission at ¶ 30, included within
“Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
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51. Plaintiff’s installment loan with “LEAD BANK,” account number 1166****,
was reported by TransUnion as delinquent for the months of August 2018
and September 2018, was reported by Experian as delinquent for the
months of August 2018 and September 2018, and was reported by Equifax
as delinquent for the months of August 2018 and September 2018.
(Plaintiff’s response to FedLoan’s Requests for Admission at ¶ 31, included
within “Exhibit 8” to FedLoan’s Motion for Summary Judgment.)
52. As of April 28, 2018, Plaintiff’s credit score was reported as 523 by
TransUnion, 506 by Experian, and 521 by Equifax. (Plaintiff’s response to
FedLoan’s Requests for Admission at ¶ 1, and April 28, 2018 Credit Report
of Deja Washington, included within “Exhibits 7 and 8” to FedLoan’s Motion
for Summary Judgment.)
53. As of August 9, 2019, Plaintiff’s credit score was reported as 585 by
TransUnion, 572 by Experian, and 580 by Equifax. (Plaintiff’s response to
FedLoan’s Requests for Admission at ¶ 1, and August 9, 2019 Credit Report
of Deja Washington, included within “Exhibits 7 and 8” to FedLoan’s Motion
for Summary Judgment.)
54. On February 28, 2019, Plaintiff requested a loan in an amount of $2,000.00
from Citadel Federal Credit Union. (Plaintiff’s response to FedLoan’s
Request for Production of Documents (Citadel Federal Credit Union
Adverse Action Notice), included within “Exhibit 6” to FedLoan’s Motion for
Summary Judgment.)
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55. Plaintiff received an Adverse Action Notice from Citadel Federal Credit
Union advising her that Citadel Bank was unable to extend credit to her at
this time. (Plaintiff’s response to FedLoan’s Request for Production of
Documents (Citadel Federal Credit Union Adverse Action Notice), included
within “Exhibit 6” to FedLoan’s Motion for Summary Judgment.)
56. Citadel Federal Credit Union’s Adverse Action Notice indicated its decision
was based in whole or in part on information obtained in a report received
from TransUnion. (Plaintiff’s response to FedLoan’s Request for Production
of Documents (Citadel Federal Credit Union Adverse Action Notice),
included within “Exhibit 6” to FedLoan’s Motion for Summary Judgment.)
57. Citadel Bank’s Adverse Action Notice indicated that Plaintiff’s credit score
as of February 28, 2019 was 489. Citadel Bank’s Adverse Action Notice
indicated several key factors that affected Plaintiff’s credit score, including:
a. Serious delinquency, and public record or collection filed; b. Time since
delinquency is too recent or unknown; c. Number of accounts with
delinquency; d. Too many accounts with balances; and e. Number of
inquiries adversely affected the credit score. (Plaintiff’s response to
FedLoan’s Request for Production of Documents (Citadel Federal Credit
Union Adverse Action Notice), included within “Exhibit 6” to FedLoan’s
Motion for Summary Judgment.)
58. Plaintiff testified at her deposition that on November 5, 2017, she was
denied a credit card from SynchBToys R Us DC. (Deposition of Deja
Washington, November 5, 2019, p. 59:12-24.)
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59. Plaintiff testified that in March of 2018, she was denied by multiple financial
institutions for a car loan. (Deposition of Deja Washington, November 5,
2019, p. 29:14-30:10.)
PLAINTIFF’S CLAIMS
To put Plaintiff’s credit history in proper context, FedLoan’s expert, John
Ulzheimer, noted that the “Plaintiff’s credit reports contain a record of over 100
late payments, three collections, two charged off accounts and two automobile
repossessions.” ECF 39-10 at p. 16. Indeed, Ulzheimer opined that “[i]n my 28+
years in the credit industry, the Plaintiff’s credit reports are among the worst I’ve
ever seen.” Id.
Yet, Plaintiff argues that her credit report from FedLoan is incorrect and
misleading because it reports Plaintiff’s historical late payment information with a
current delinquency code in the “Pay Status” field (“Account 120 Days Past Due
Date”) making it appear that Plaintiff is currently late and still has a balance on
her student loan. As a result, Plaintiff believes that prospective lenders believe
that she is currently late which negatively reflects on her creditworthiness.
Noticeably, Plaintiff does not contend that her federal student loan was at least
120 days past due at the time the loan was transferred back to the DOE and that
she has never made even a single payment on that loan.
Plaintiff contends that after receiving notice of Plaintiff’s dispute from
TransUnion and Experian, FedLoan willfully and negligently failed to conduct a
reasonable investigation of the inaccurate information that Plaintiff disputed, and
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continued reporting the inaccurate information to the credit bureaus. Compl. at ¶
32. Plaintiff claims that as a result of FedLoan’s actions, she has suffered, inter
alia, “loss of creditworthiness” and a “loss of credit opportunity” Id. at 35.
In its motion for summary judgment, FedLoan argues that it conducted a
good faith and reasonable investigation into the complaints Plaintiff raised with
TransUnion and Experian. FedLoan argues that the results of its investigation
revealed that the reported “Pay Status” as “Account 120 Days Past Due Date” is
simply not inaccurate and could not reasonably mislead creditors into believing
that the student loan is currently past due when considered in the context of the
other information given about the account – that it was closed as of October 3,
2017 and has a zero-dollar balance. FedLoan argues that the “Pay Status” field
accurately reflects that Plaintiff was more than 120 days behind in her obligations
on this federal school loan at the time the loan was closed as of October 3, 2017
and that prospective lenders need to be aware of this delinquency.
DISCUSSION
Congress enacted the FCRA “to protect consumers from the transmission
of inaccurate information about them, and to establish credit reporting practices
that utilize accurate, relevant, and current information in a confidential and
responsible manner.” Cortez v. Trans Union, 617 F. 3d 688, 707 (3d Cir. 2010).
To support these goals, Congress included “provisions intended ‘to prevent
consumers from being unjustly damaged because of inaccurate or arbitrary
information.’” Id. [citations omitted.] In Cortez, our Court Appeals instructs,
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“‘[t]hese consumer oriented objectives support a liberal construction of the
[FCRA],’ and any interpretation of this remedial statute must reflect those
objectives.” Id. [citations omitted.]
As a federal student loan servicer, FedLoan is required to report the
history of all borrower accounts to the national credit reporting agencies. 34
C.F.R. § 685.211. In this regard, FedLoan acts as a “data furnisher.” A data
furnisher is an entity that furnishes information regarding a consumer to the credit
reporting agencies (“CRA”) for inclusion on a consumer’s credit report. Harris v.
Pennsylvania Higher Education Assistance Agency, 696 Fed. App’x. 87, 90 (3d
Cir. June 22, 2017) (citing 16 C.F.R. § 660.2(c)). 15 U.S.C. § 1681s-2(b) imposes
certain duties on a data furnisher who has been notified by a consumer credit
reporting agency that a consumer has disputed information furnished by that data
furnisher. See Seamans v. Temple University, 744 F.3d 853, 864-65 (3d Cir.
2014). Once the data furnisher receives such notice, the data furnisher must
(A) conduct an investigation with respect to the
disputed information; (B) review all relevant
information provided by the [CRA] ...; (C) report the
results of the investigation to the [CRA]; (D) if the
investigation finds that the information is incomplete
or inaccurate, report [the results of the investigation]
to all other [CRAs] to which the [furnisher] furnished
the [disputed] information ...; and (E) [modify, delete,
or permanently block the reporting of disputed
information that the furnisher finds inaccurate,
incomplete, or unverifiable after reinvestigation.]
15 U.S.C. § 1681s–2(b)(1).
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Section 1681s-2(b) of FCRA allows a consumer to sue a data furnisher if
the furnisher provides “incomplete or inaccurate” information to a CRA and then
refuses to “delete” or “modify” that information in response to a consumer
complaint. 15 U.S.C. § 1681s-2(b)(1). Our Court of Appeals has explained that
“[a] report is inaccurate when it is ‘patently incorrect’ or when it is ‘misleading in
such a way and to such an extent that it can be expected to [have an] adverse[ ]’
effect.” Schweitzer v. Equifax Info. Solutions LLC, 441 Fed. Appx. 896, 902 (3d
Cir.2011) (quoting Dalton v. Capital Assoc. Indus. Inc., 257 F.3d 409, 415 (4th
Cir.2001)). In determining whether reported information is misleading, the Court
must view the information in a credit report from the perspective of a reasonable
creditor. Horsch v. Wells Fargo Home Mortg., 94 F. Supp. 3d 665, 681 (E.D. Pa.
2015).
According to the affidavit of the Risk, Policy and Compliance Coordinator
for the Credit Bureau Reporting Department at PHEAA, Leslie Harris (“Harris”),
the ACDV FedLoan received from TransUnion on May 12, 2018, contained
“dispute codes 106 and 118, as well as a separate instruction requesting
FedLoan verify [Plaintiff’s] federal student loan was indeed transferred.” ECF 393 at ¶19. According to Harris, “[d]ispute Code 106 includes instruction that the
data furnisher needs to verify the Account Status, Payment Rating, and Account
History.” Id. at ¶ 20. “Dispute Code 118 includes instruction that the data
furnisher needs to verify Current Balance and the Amount Past Due.” Id. at ¶ 21.
Harris avers that “[w]hen responding to credit disputes, FedLoan
processors follow the procedures in FedLoan’s ‘Credit Dispute Resolution
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Procedure’ [CDRP] document.” Id. at ¶ 22. Harris avers that the FedLoan CDRP
instructs that for federal student loans, “Account Status ‘05’ should be used for all
federal student loans which are transferred or deconverted due to delinquency.”
Id. at ¶ 23. Under the CDRP, if the Account Status of 05 is used, “’the Payment
Rating must be populated based on the status of the loan immediately prior to
the condition that resulted in such status.’” Id. at ¶ 24. According to Harris, “[t]he
CDRP instructs that the payment Rating of ‘6’ must be used for transferred
federal loans which are at least 180 days past due.” Id. at ¶ 25. Harris further
avers that with regard to the Current Balance, the CDRP instructs, “‘The current
balance must be zero when the Account Status is 05. . . .’” Id. at ¶ 26. With
regard to the Amount Past Due, “CDRP instructs, ‘The Amount Past Due is zero
when the Account Status is 05. . . .” Id. at ¶ 27.
FedLoan responded to the TransUnion ACDV on June 4, 2018. Id. at ¶ 28.
In its response, FedLoan verified the Account States as “05” – meaning “account
transferred”. FedLoan also updated the Payment Rating from “4” (120-149 days
past due) to “6” (180 or more days past due) Id. at ¶¶29-30. FedLoan further
verified the current balance was $0.00, and updated the past balance, actual
payment and scheduled monthly payment to all reflect $0.00 Id. at ¶ 29. As such,
Harris characterizes that Fedloan’s investigation of the TransUnion ACDV as
“reasonable.” Id. at ¶ 30.
FedLoan also received an ACDV from Equifax on May 16, 2018. Id. at ¶
31. The Equifax ACDV contained only one dispute code 112, “which generally
requests the data furnisher to confirm a complete ID and verify all Account
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Information.” Id. at ¶ 32. FedLoan responded to the Equifax ACDV on June 4,
2018. Id. at ¶ 34. Harris avers that the “only notable distinction between the
TransUnion ACDV and the Equifax ACDV is that the Equifax ACDV references
an Account Status of 82, and no Payment Rating was provided by Equifax in the
‘Request Data’ filed.” Id. at ¶ 34. According to Harris, the CDRP explains that
Account Status 82 “is only appropriate for student loans still being serviced by
FedLoan, which are past due between 120 and 149 days.” Id. at ¶ 35. In addition,
Harris avers that since Plaintiff’s loan had been transferred, FedLoan in its
response updated the Account Status filed to “05.” Id. at ¶ 36. Since the Account
Status was 05, FedLoan also added in its response that the “Payment Rating”
was “6.” Id. at ¶ 37. Finally, “FedLoan also verified all balances, payments and
past due amounts were $0.00.” Id. at ¶ 38.
Finally, Harris averred that FedLoan verified or modified all of Plaintiff’s
demographic information consistent with the CDRP. Id. at ¶ 40. Harris concluded
by averring that FedLoan’s response to the Equifax dispute “is consistent with its
internal records verifying that [Plaintiff’s] federal student loan transferred to the
DOE when it was more than 180 days past due, and all balances and past due
amounts were $0.00. FedLoan’s investigation of the Equifax ACDV was
reasonable.” Id. at ¶ 41.
The Court finds that FedLoan complied with its obligations under 15
U.S.C. § 1681s–2(b)(1). FedLoan investigated and reviewed the disputed
information supplied in the TransUnion and Equifax ACDVs after which it
either verified or modified the disputed information pursuant to its Credit
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Dispute Resolution Procedure. Unfortunately for Plaintiff one of the
modifications it made accurately reflected that Plaintiff had actually been 180
days or more delinquent (instead of 120 days or more past due) at the time her
loan was transferred.
Further, the Court finds, as a matter of law, that there is nothing in
Plaintiff’s credit report that it is “patently incorrect” or “misleading in such a way
and to such an extent that it can be expected to have an “adverse effect” on
Plaintiff’s creditworthiness. Schweitzer 441 Fed. App’x. at 902.
In Schweitzer, our Court of Appeals held a CRA accurately represented
information in its reports when a mortgage account read “Over 120 Days Past
Due,” but the “ADDITIONAL INFORMATION” field in the same report showed
“Account Paid/Zero Balance.” Schweitzer, 441 F. App’x at 902. The consumer
argued the reporting agency violated the FCRA by stating his mortgage account
“had been ‘Over 120 Days Past Due’” in two different credit reports. Id. Our
Court of Appeals affirmed summary judgment on this entry because the reporting
agency “properly reflected” the consumer had paid off the balance of his account.
Id. at 902. As a result, the Court determined the report did not include inaccurate
information. Id.
Indeed, district courts both in this Circuit and throughout the country have
routinely granted defendants’ dispositive motions on plaintiffs’ § 1681s-2(b)
claims that the reporting of terms of a closed account with zero balance, yet with
the pay status listed as past due is not “patently incorrect” or “misleading.” See,
e.g., Samoura v. Trans Union LLC, 2021 WL 915723 (E.D. Pa. March 10,
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Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 24 of 34
2021)(Kearney, J.); Parke v. Trans Union, LLC, No. 20-4487, ECF Doc. No. 32
(Order) (E.D. Pa. March 5, 2021)(Robreno, J.); Bibbs v. Trans Union LLC, 2021
WL 695112 (E.D. Pa. February 23, 2021)(Kearney, J.); See also, e.g., Gross v.
Private National Mortgage Acceptance Co., LLC, 2021 WL 81465 (E.D.N.Y. Jan.
9, 2021) 2; Hernandez v TransUnion, LLC, No. 19-cv-1987, Dkt. No. 82, (N.D.
Fla. Dec. 10, 2020) (concluding that reporting a “pay status” as “120 days past
due” for a closed account with a $0 balance “would not reasonably mislead a
creditor to believe [the plaintiff] is currently past due on this loan”); Settles v.
Trans Union, LLC, 2020 WL 6900302 (M.D. Tenn. Nov 24, 2020) (same); Euring
v. Equifax Information Servs., LLC, No. 19- cv-11675, 2020 WL 1508344 (E.D.
Mich. Mar. 30, 2020) (finding nothing false or materially misleading about the
“monthly payment” information on plaintiff’s credit reports in light of the other
information that appears on those reports); Parker v. 1st Franklin Financial Corp.,
et. al, No. 1:19-cv-1897-TCB-JKL (Document 42)(January 10, 2020) (adopted
January 15, 2020); Magee v. Ford Motor Credit Company, LLC, No. 2:18-cv-148KS-MTP, 2019 WL 7593371 (S.D.Miss. November 15, 2019); Burrow v. Equifax
Info. Sys., LLC, Case Action File No. 1:18-cv-05134-JPB-LTW, 2019 WL
54417147, at *8-*9, (N.D.Ga., August 5, 2019) adopted report and
recommendation 2019 WL 5410067 (N.D.Ga. August 26, 2019); Jones v. Equifax
Info. Servs., LLC, No. 2:18-cv-2814, 2019 WL 5872516 (M.D. Tenn. Aug. 8,
The Court is aware that Judge Cogan subsequently allowed the Plaintiff to amend the Complaint against
the furnisher defendant to include the allegation that “credit scoring algorithms look to the pay status field
as a field that instructs whether the account should be considered as an actively derogatory.” Plaintiff has
made no such allegation in this case and his expert, Evan Hendricks, also make no reference to “credit
scoring algorithms.”
2
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2019) (finding that a credit report showing a monthly payment obligation when
the account was closed and had a zero-dollar balance was not materially
misleading because “a reasonable prospective lender would understand [that]
the report showed a past obligation only”); Meeks v. Equifax Information
Services, LLC, Civil Action File No. 1:18-cv-03666-TWTWEJ, 2019 WL 1856411,
at *5 (N.D. Ga. March 4, 2019), report and recommendation adopted 2019 WL
1856412 (N.D. Ga. April 23, 2019); Hunt v. J.P. Morgan Chase Bank, N.A., Case
No. 17-cv-62094-BB, 2018 WL 1183357 (S.D. Fl. February 23, 2018); Alston v.
Equifax Information Services, LLC, Civil Action No. TDC-13-1230, 2014 WL
6388169 (D.Md., November 13, 2014).
Pursuant to the Credit Reporting Resource Guide (“CRRG”), a data
furnisher such as FedLoan that is servicing a transferred account is required to
report the “Pay Status” at the time the account is transferred and not on the date
of access. Harris Affidavit, ECF 39-3, Ex. A at p. 22, FAQ No. 46; Ulzheimer
Report, ECF 39-10 at p. 14. As one district court has explained, “[t]he payment
rating code, then, is indicative of the status of the paid or closed account while
the account was still active, not at the time the consumer’s credit report is
accessed.” Moulton v. Americredit Financial Services, Inc., No. C. 04-02485 JW,
2006 WL 8459731, at *3 (N.D.Ca. December 29, 2006) (emphasis in original). In
addition, all of the above cases have found that the tradeline must be viewed in
its entirety, rather than simply focusing on a single field such as “Pay Status.”
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On October 3, 2017, the date FedLoan requested that Plaintiff’s student
loan be transferred to the DOE for non-payment, Plaintiff’s tradeline appeared as
follows:
ECF 43-1, Ex. A.
By examining Plaintiff’s credit report as it appeared on October 3, 2017, a
reasonable creditor would note that in addition to the “Pay Status” field being
marked on the tradeline as “Account 120 Days Past Due Date,” the remainder of
the tradeline reveals that “Date Closed” was “10/3/2017” and directly across the
“Balance” field reads “$0.” In addition, the remarks section contains, inter alia,
the notation “ACCT CLOSED DUE TO TRANSFER; TRANSFERRED TO
ANOTHER OFFICE.” The Court finds that any reasonable creditor construing the
tradeline in its entirety, as mandated by the prior referenced cases, would clearly
realize that Plaintiff’s loan with FedLoan was closed due to transfer and had a
remaining balance of $0.The tradeline also provides payment history that clearly
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shows that Plaintiff became 120 days delinquent on her student loan in February,
2017 and that she remained at least 120 days delinquent through the date her
account was transferred.
Further, on October 12, 2017, the date Plaintiff’s loan was transferred to
the DOE, Plaintiff tradeline noted a payment rating of 6-180 days or more past
the due date, but also that the current balance on her loan was $0.00, the
scheduled monthly payment was $0.00, the actual payment amount was $0.00,
the amount past due was $0.00, and that the status of the account was 05closed due to transfer. ECF 77-2, p. 330. There is simply nothing in Plaintiff’s
credit report that a reasonable jury could find misleading.
Under these circumstances, reporting a Pay Status of “current” or “paid as
agreed” as advocated by Plaintiff could imply that Plaintiff satisfied her loan
obligations when it is clear that she never made a payment on her student loan
and actually defaulted. Indeed, Plaintiff is fortunate that the “Balance” field reads
“$0.00” and that the tradeline lists her account as closed given the undisputed
fact that Plaintiff never made a single payment on her loan and, as a result, the
loan needed to be transferred back to the DOE.
To add further clarity to the matter, FedLoan’s expert opined:
FedLoan credit reported the Plaintiff’s defaulted
student loan in compliance with industry standards as
per CRRG guidance regarding how to report accounts
that were transferred while delinquent. The Plaintiff’s
loan was, in fact, at least 120 days past due/late when
FedLoan transferred the loan back to the United States
Department of Education.
Per CRRG guidance going back to at least 2009, an
account that has been transferred internally or to a
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Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 28 of 34
servicer is to be reported with a zero balance and with
an Account Status Code that specifies the status of the
account AT THE TIME OF TRANSFER (emphasis in
original).
When the subject FedLoan account was transferred it
was, in fact, 120 days past due. Simply put and
pursuant to long standing industry guidelines FedLoan
properly reported the Account Status as being 120
days past due as of September 2017.
The status of an account or, formally, the Account
Status is a Metro-2 field representing the condition of
an account as of the Date of Account Information. It
does not and is not intended to represent the condition
of an account as of the current date. In fact, FedLoan
had not reported the Plaintiff as being currently
delinquent on her loan since September of 2017, when
she was at least 120 days delinquent. Since
September 2017 FedLoan reported “no data” as a
current status.
ECF 39-19 at pp. 14-15. As to Plaintiff’s claim that she suffered “loss
of creditworthiness” or “loss of credit opportunity,” FedLoan’s expert
stated:
…there is simply no evidence in the record of this
lawsuit that any of this actually occurred. And, if it did
occur there is no evidence the Plaintiff was denied
credit or experienced adverse creditor actions as a
result of FedLoan’s credit reporting. However, given
the prevalence of unrelated derogatory information
polluting the Plaintiff’s credit reports, it would not
surprise me if creditors avoided doing business with
the Plaintiff as she has a long record of irresponsible
credit management including defaults, collections and
automobile repossessions.
Id. at p. 16.
In his expert report, Plaintiff’s expert, Evan Hendricks, opined that:
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•
A well-known and long-standing cause of credit report inaccuracy
and/or incompleteness is the furnishing of inaccurate and/or
incomplete data by furnishers such as Defendant PHEAA.
•
Knowledge of and consensus about this problem was so
widespread that in 1996, Congress amended the FCRA to place a
duty on ‘furnishers’ of credit report information, such as PHEAA, to
report accurate information to consumer reporting agencies, and to
investigate consumers’ disputes of inaccurate and/or incomplete
data that were forwarded to furnishers by CRAs.
•
PHEAA failed both of its accuracy-related responsibilities. First, it
furnished information to CRAs portraying Plaintiff with the current
‘Pay Status’ of ‘Account 120 Days Past Due Date,’ when in fact as
of January 2018 Plaintiff was not past due on any obligation to
PHEAA because she did not have any obligation for any debts to
PHEAA. (emphasis in original.)
•
Second, when Plaintiff disputed the inaccurate PHEAA tradeline,
PHEAA, rather than conducting an adequate investigation which
was reasonably calculated to determine the accuracy or
completeness of the disputed data, merely confirmed that the
inaccurate, current ‘Pay Status’ of ‘Account 120 Days Past Due
Date,’ should remain in Plaintiff’s Trans Union credit file.
•
Plaintiff’s ACDV dispute informed PHEAA that she was wrongly
being portrayed as currently past due even though the ‘. . . balance
clearly show(ed) $0. Further, I think the accounts were transferred
which also means its (sic) impossible for it to be currently late with
this creditor.’
•
PHEAA’s responses to her ACDV dispute were inadequate
because it did not investigate sufficiently to discover that PHEAA’s
placement of a ‘Payment Rating’ of ‘4’ was causing Plaintiff’s
PHEAA tradeline to be portrayed with a current ‘Pay Status’ of
‘Account 120 Days Past Due Date.’ So rather than discovering it
was causing this inaccuracy, PHEAA worsened it by instructing
TransUnion and Equifax to change the ‘Payment Rating’ to ‘6,’
which then caused Plaintiff’s PHEAA tradeline to be portrayed with
a current ‘Pay Status’ of ‘Account 180 Days Past Due Date.’
(emphasis in original.)
•
PHEAA’s inadequate response reflected its disregard of the
essence of Plaintiff’s ACDV dispute—namely, that as of 2018,
PHEAA’s portrayal of a current ‘Pay Status’ of ‘Account 120 Days
Past Due Date,’ was inaccurate because Plaintiff was neither past
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Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 30 of 34
due on any obligation to PHEAA nor even had any obligation for
any debts to PHEAA. (emphasis in original.)
•
PHEAA’s inadequate response also reflected its disregard of the
both the general notice from the FCA’s enforcement authorities to
furnishers as to what amounted to an unacceptable, superficial
investigation, as well as specific notice as to how the ‘Payment
Rating’ could cause a tradeline’s current status to be portrayed
inaccurately.
ECF 39-11. pp. 3-4.
In a follow-up affidavit to Ulzheimer’s expert report 3, Hendricks averred, in
pertinent part, as follows:
7. PHEAA render’s Plaintiffs’ Equifax and Trans
Union credit reports inaccurate when it furnishes a
derogatory payment rating because, for Equifax and
Trans Union, the payment rating supercedes [sic] the
status code and thereby becomes the ‘status.’ This
made Plaintiff wrongly appear to currently have a ‘past
due status’ on a PHEAA account that in fact had been
transferred. This derogatory status was both
inaccurate and unfairly harmful to Plaintiffs’
creditworthiness.
8. It is inconsistent with the industry standard to
interpret the CRRG to allow the reporting of a current
late status on an account that is transferred. On its first
page, the CRRG emphasizes that in credit reporting,
the goal and the most important standard is accuracy.
It is patently inaccurate to furnish a payment rating that
supersedes the status code. In fact, Experian, one of
the “Big Three” credit reporting agencies, completely
precludes this type of reporting altogether.
9. Interpreting the CRRG to allow the current
status of a transferred account is incorrect because it
results in inaccurate credit reporting which is
In order to permit the filing of Hendrick’s affidavit, the Court permitted FedLoan to depose Hendricks
[ECF 50] and permitted both parties to file supplemental memoranda [ECF 53].
3
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Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 31 of 34
misinterpreted by lenders’ loan underwriting programs
to reflect that a given account is currently late—
harming creditworthiness
ECF 43-1 at pp 8-9.
As pointed out by FedLoan’s expert, the problem is Plaintiff’s expert
equates the field “Pay Status” or “Account Status” of “Account 120 Days Past
Due Date” with “Current Pay Status” of “Account 120 Days Past Due Date” in an
effort to show that FedLoan’s credit report was inaccurate or misleading. In his
expert report, Hendricks has subjectively added and highlighted the term
“current” to a field that simply states “Pay Status.” According to Hendricks, since
FedLoan’s credit report indicated that Plaintiff’s current status was 120 days
delinquent, FedLoan’s credit report was inaccurate and misleading. ECF 3911(emphasis in original).
FedLoan’s expert, however, clarifies this in his Rebuttal Report by pointing
out that in the Metro 2 credit reporting language 4, “there is no such thing as a
‘Current Status’ or a ‘Current Pay Status.’” ECF 39-10, p. 27. Instead, FedLoan’s
expert opined that the purpose of the “‘Pay Status” field is to “specify the status
of the account at the time of the transfer (emphasis in original). There is no
guidance for transferred accounts that indicates the Account Status is supposed
to represent any date after the date of transfer, up to and including the present
date.” Id. FedLoan’s expert goes on to state that “[t]he definition of ‘Account
The Metro 2 is the standard electronic data reporting format adopted by the Consumer Data Industry
Association (“CDIA”). This is the format that permits data furnishers to transmit data directly to the credit
reporting agencies. The Credit Reporting Resource Guide is a document published by the CDIA, which
includes the entire Metro 2 format.
4
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Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 32 of 34
Status’ in the Metro 2 credit reporting language is, ‘the status code that properly
identifies the current condition of the account as of the Date of Account
Information.’ (emphasis in original). The Date of Account Information, as
reported by [FedLoan] was October 3, 2017. The Plaintiff’s account was, in fact,
at least 120 days past due at that time thus FedLoan’s reporting is accurate.”5 Id.
Plaintiff relies on a number of cases that are distinguishable from this case
and the other cases cited above. In Mund v. Transunion, No. 18-6761, 2019 WL
955033, at * 1 (E.D.N.Y. Jan. 9, 2021), the credit report indicated that the plaintiff
still had a monthly payment of $4,123 on the account, and in Friedman v.
CitiMortgage, Inc., No. 18-11173, 2019 WL 4194350, at * 1 (S.D.N.Y. Sept. 3,
2019), the credit report stated that the plaintiff had a monthly payment of $360.
These entries “ma[de] [the plaintiffs’] monthly obligations look greater than they
are,” raising the plausible inference that a creditor could read the “Pay Status” as
a current one. Friedman, 2019 WL 4194350, at *3. By contrast, in the case sub
judice, Plaintiff defaulted on her student loan and the information provided
regarding her account states that her account is closed and does not indicate any
monthly payment amount.
In Macik v. JPMorgan Chase Bank, N.A., No. G-14-44, 2015 WL
12999728, at * 1 (S.D. Tex. May 28, 2015), report and recommendation adopted
by Macik v. Trans Union LLC, No. 14-44, 2015 WL 12999727 (S.D. Tex. July 31,
5
The Court also notes that Hendrick’s averment that “[i]nterpreting the CRRG to allow the current status of
a transferred account is incorrect because it results in inaccurate credit reporting which is misinterpreted by
lenders’ loan underwriting programs to reflect that a given account is currently late—harming
creditworthiness” appears to be a conclusory statement not supported anywhere in Hendrick’s expert report
or deposition.
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Case 5:19-cv-00143-JLS Document 78 Filed 09/08/21 Page 33 of 34
2015), a case relied on heavily by Plaintiff’s expert, the report listed a mortgage
account as “90 days past due” even though the consumer had fully paid off her
mortgage, including three past due payments. Here, by contrast, the Plaintiff
does not dispute that she never made a single payment and that she defaulted
on her obligations to FedLoan before the account was transferred to the DOE.
Daugherty v. Ocwen Loan Servicing, LLC, 701 Fed.App’x. 246 (4th Cir.
2017), is also clearly distinguishable. In Daugherty, as in Macik, a mortgagee fell
delinquent on his home loan but brought his account current before the data
furnisher’s reporting ceased. See id. at 249. In addition, when the mortgagee
initially filed a credit dispute related to his loan origination date, the credit
reporting agency erroneously created a second tradeline for the same account.
See id. When the mortgagee alerted the loan servicer that there now existed two
tradelines – one showing the loan was current, while the other showed the loan
was closed and 120 days past due – both tradelines were repeatedly verified as
accurate. See id. at 250. Under these circumstances the Court of Appeals for the
Fourth Circuit upheld a jury’s verdict in favor of the mortgagee. By contrast, the
case sub judice, involves a student loan borrower who obtained a federal student
loan, made absolutely no payments, resulting in her loan having to be
transferred back to the lender without any payments ever having been made.
Finally, the Plaintiff directs the Court’s attention to a very recent decision
from this Court, Barrow v. Trans Union, LLC, Case No. 2:20-cv-3628 (E.D. Pa.
April 9, 2021), in which Judge Joyner respectfully disagreed with Judge
Kearney’s decision in Bibbs, supra, and denied the Defendant’s motion for
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judgment on the pleadings. Central to Judge Joyner’s decision, however, was
that, unlike here, no discovery had been taken and a more complete record had
not yet been developed. In addition, the Plaintiff in Barrow, unlike the Plaintiff
here, clearly alleged that she had fully satisfied her account.
While Plaintiff argues that questions about the inaccurate or misleading
quality of information are for the jury, the material facts are not in dispute. After
construing those facts in the light most favorable to Plaintiff and drawing all
inferences in her favor, and construing the FCRA liberally in order to protect
consumers such as Plaintiff, the Court concludes as a matter of law that FedLoan
complied with its obligations under 15 U.S.C. § 1681s–2(b)(1) and that the
reported information is neither inaccurate nor misleading. Accordingly, FedLoan’s
motion for summary judgment is granted.
34
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