9th Circuit affirms credit reporting agency’s code data did not violate the FCRA

Courts Ninth Circuit FCRA Credit Reporting Agency Short Sale Foreclosure Fannie Mae Appellate

On May 29, the U.S. Court of Appeals for the 9th Circuit affirmed summary judgment for a national credit reporting agency, holding that the company did not violate the Fair Credit Reporting Act (FCRA) in its reporting of short sales executed by the plaintiffs. The decision results from a proposed class action suit alleging that the credit reporting agency violated the FCRA by reporting short sales executed between 2010 and 2011 with code numbers that misreported the data as foreclosures. In September 2016, the lower court found that the credit reporting agency provided creditors with clear instructions on how to interpret the code system and Fannie Mae’s Desktop Underwriter program misinterpreted the “settled” code number “9” as a foreclosure, which was not the credit reporting agency’s fault. In affirming the lower court’s decision, the 9th Circuit held that the credit reporting agency “clearly and accurately disclosed to [consumers] all information that [the company] recorded and retained that might be reflected in a consumer report.” Additionally, the panel noted that the credit reporting agency was not required to report that Fannie Mae mishandled the code data when it became aware of it.