In Cortez v. Trans Union LLC, the United States Court of Appeals for the Third Circuit decided a case at the intersection of the Fair Credit Reporting Act (FCRA) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, better known as the USA PATRIOT Act (Patriot Act). Central to the case was a service offered by Trans Union through a third-party vendor called “OFAC Advisor.” OFAC Advisor was designed to generate an alert on a Trans Union credit report whenever an individual’s name was similar to a name on the Office of Foreign Asset Control’s (OFAC) “Specially Designated Nationals” (SDN) list. The SDN list is compiled by OFAC to identify individuals such as terrorists and narcotics traffickers with whom, under the Patriot Act and accompanying regulations, U.S. persons are generally prohibited from dealing.
Tag Archives: Third Circuit
Ninth Circuit Creates Split About the Meaning of the Word “Sue” as Used in the CROA
Posted in Credit CARD ActThe Credit Repair Organizations Act (CROA), found at 15 U.S.C. § 1679, was enacted to ensure consumers of services of credit repair organizations are provided with the information necessary to make informed decisions regarding the purchase of such services; and to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. Section 1679c of the
CROA requires that credit repair organizations make certain written disclosures to consumers including that consumers have “a right to sue a credit repair organization that violates” the CROA. The CROA also contains a provision that voids any waiver by consumers of rights provided in the CROA. In a recent decision, Greenwood, et al. v. CompuCredit Corp., —F.3d—, 2010 WL 3222415 (9th Cir. Aug. 17, 2010)(Thomas, J.), the Ninth Circuit disagreed with decisions from other circuits about whether arbitration agreements between credit repair organizations and consumers are enforceable when a consumer sues for violations of the CROA. Specifically, there is now a dispute among the circuits about what the word “sue” means as used in the CROA. Does the word “sue” as used in Section 1679c create a right for consumers to sue in court; or does the word “sue” encompass dispute resolution through arbitration?
Third Circuit Joins Other Circuits, Holding That A Plaintiff Must Prove Detrimental Reliance To Recover Actual Damages For TILA Disclosure Violation
Posted in Truth in Lending ActIn Vallies v. Sky Bank, the Third Circuit joined the First, Fifth, Eighth, Ninth, and Eleventh Circuits, holding that the Truth in Lending Act (“TILA”) requires plaintiffs to prove actual damages sustained as the result of a disclosure violation.
Plaintiff Vallies entered into a loan and security agreement with the defendant Sky Bank, which financed an automobile and a debt cancellation insurance premium, among other things, for Vallies. The insurance premium was not included in the ”finance charge,” as TILA requires, and was lumped in with a general service contract charge, rather than being itemized as a separate item. The parties settled Vallies’ statutory damages claim under TILA. The District Court subsequently certified a class for settlement purposes and approved a settlement, which did not cover Vallies’ actual damages under 15 U.S.C. § 1640(a)(1). Sky Bank moved for summary judgment, arguing that Vallies cannot recover actual damages under TILA because Vallies did not plead, and could not prove, actual reliance. The District Court granted summary judgment in favor of Sky Bank.
On appeal, Vallies acknowledged that the vast majority of available authority on the issue of detrimental reliance was against him, but argued that “the weight of that authority is wrong.” The Third Circuit disagreed, issuing a 31-page opinion (found here).
Third Circuit Sidesteps Strict Liaiblity Argument For “Excessive” Title Insurance Fees Under TILA
Posted in Truth in Lending ActYesterday, in In re Madera, the United States Court of Appeals for the Third Circuit rejected the appellants claim that the Truth in Lending Act (“TILA”) requires lenders to disclose title insurance fees if the amount charged is higher than the prevailing rates set forth in the Manual of Title Insurance Rating Bureau of Pennsylvania (“TIRBOP Manual”), finding that the appellants had failed to raise an issue of fact on summary judgment.