Adverse Info Must Come From Third Party:Mathiesen

David A. Szwak

Adverse Info Must Come From Third Party:Mathiesen

Postby David A. Szwak » Fri Dec 02, 2005 9:34 pm

Mathiesen v. Banc One Mortgage, No. 98-6069 (10th Cir. 1998) (Okl.)

Plaintiff brought gender discrimination (ECOA) and 1681m(b) claim in connection with credit denial. In affirming dismissal of the claims, the court found that:

1. Plaintiff was denied credit because the underwriter was unable to verify plaintiff’s income and because she had an inadequate credit file;

2. Plaintiff was denied a second time as the underwrite was unable to verify her income;

3. Adverse action notices indicated information from "outside sources" which defendant showed to be plaintiff’s own tax returns (which she supplied);

4. Since the lender did not rely on any information provided by a third party, the FCRA disclosure requirements did not apply in this case;

5. 1681m(b) terms "person" and "consumer" are "meant that the two cannot be the same entity;"

6. When negative information is gleaned from the consumer’s own records, the consumer is aware of that information and no disclosure is necessary.
Section 1681m(b) concerns adverse action disclosures when information is obtained from a person other than a consumer reporting agency bearing on the consumer’s credit worthiness, then disclosure is triggered.

To establish a gender discrimination action in connection with a credit denial, plaintiff must prove:
1. She is a member of a protected class;
2. She applied for a loan from defendant;
3. She was qualified for the loan; and
4. Despite being qualified her loan application was denied.
Mathiesen v. Banc One Mortgage, No. 98-6069 (10th Cir. 1998) (Okl.); Mercado-Garcia v. Ponce Fed. Bank, 979 F.2d 890, 893 (1st Cir. 1992); McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); Moore v. U.S. Dept. of Agriculture, 55 F.3d 991, 991 (5th Cir. 1995). Contra: Latimore v. Citibank Fed. Sav. Bank, 151 F.3d 712, 713-15 (7th Cir. 1998).

Return to “Adverse Action Notice Rules: 15 U.S.C. 1681m and ECOA”

Who is online

Users browsing this forum: No registered users and 3 guests