District Court (Cal.) Says FCRA Plaintiff Received Lender’s “Firm Offer of Credit” under Mailbox Rule; FCRA Imposed No Time Requirement on Lender to Mail “Firm Offer of Credit”

In Derderian v. Southwestern & Pacific Specialty Finance, Inc., 2014 WL 6980525 (S.D.Cal. 2014), Judge Lorenz granted summary judgment to a lender on a FCRA claim that alleged that the lender had accessed the Plaintiff’s credit report for an impermissible purpose without making a Firm Offer of Credit.  The facts were as follows:

On September 15, 2012 and March 15, 2013, Southwestern obtained Derderian’s consumer report.FN1 (Plf.’s Opp’n. Exhs. 1, 2.; Def.’s MSJ Ps & As at 4.) Derderian claims Southwestern never made her a firm offer of credit after receiving either of the above consumer reports. (Compl. ¶¶ 21, 22; Plf.’s Opp’n at 1.) Southwestern asserts it extended firm offers of credit to Derderian after obtaining her consumer report in both instances in the form of mailers sent in December 2012 and May 2013, respectively. (Def.’s MSJ Ps & As at 4.)

The District Court granted summary judgment to the defendant.

Southwestern claims it is entitled to summary judgment because it complied with the FCRA. Under the FCRA, any consumer reporting agency may furnish an individual’s consumer report with the individual’s written consent or for certain “permissible purposes.” 15 U.S.C. § 1681b(a), (c), (f). One such permissible purpose is to extend a firm offer of credit to a consumer. 15 U.S.C. § 1681b(c)(1)(B)(i). A firm offer of credit is “any offer of credit … to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer …” 15 U.S.C. § 1681a(l).  The FCRA permits a lender to make “promotional inquiries” where the lender “identifies criteria bearing on an individual’s creditworthiness and submits a request to a credit reporting agency to compile a list of consumers whose credit reports meet those criteria.” Banga v. Chevron U.S.A., Inc., No. C–11–01498, 2013 WL 71772, at *11 (N.D.Cal. Jan. 7, 2013). The lender then uses this list “to solicit consumers by extending firm offers of credit, often in the form of advertisements or fliers.” Id.  Southwestern asserts that it complied with the FCRA because it obtained Derderian’s credit for the permissible purpose of extending a firm offer of credit, and sent Derderian a firm offer of credit after each of the times Southwestern obtained her consumer report on September 15, 2012 and March 15, 2013. (Def.’s MSJ Ps & As at 2:26–3:5, 4:18–25; Decl. Yanjue Li ¶¶ 4–5, 10–11.)  To support this assertion, Southwestern provided a declaration by Yanjue Li (“Li”), a senior analyst at Axcess Financial Services, Inc. (“Axcess”). Axcess handles certain marketing and back-office support services for products offered by Southwestern. (Decl. Yanjue Li ¶ 1.) With respect to Derderian’s September 15, 2012 consumer report, Li stated that Axcess’s records show Derderian was “on a list of individuals whose consumer reports were obtained by Axcess as part of a prescreening process and who were sent mailers as part of a holiday campaign in December 2012” for the purpose of making a firm offer of credit. ( Id. ¶¶ 3–5.) Axcess used a third-party mail house, Tri–Win Outsourcing, Inc. (“Tri–Win”), who printed and mailed Derderian a firm offer of credit in the form of a post card. ( Id. ¶¶ 6–7; Def.’s MSJ Ps & As at 4.) With respect to Derderian’s March 15, 2013 consumer report, Li stated Axcess’s records showed Derderian was “on a list of individuals whose consumer reports were obtained by Axcess as part of a prescreening process and who were sent mailers in May of 2013” for the purpose of making a firm offer of credit. (Decl. Yanjue Li ¶¶ 9–11;.) Axcess again used Tri–Win to print and mail Derderian a firm offer of credit in the form of a “snap pak.” ( Id. ¶¶ 12–13; Def.’s MSJ Ps & As at 4.)Southwestern also provided an exemplar of the postcard mailer it sent Derderian after it received her consumer report on September 15, 2012 and an exemplar of the “snap pak” mailer it sent Derderian after it received her consumer report on March 15, 2013.FN3 (Def.’s Exhs. A, B.) In both the postcard and “snap pak” mailers, Southwestern informs the recipient that he or she has been “pre-selected” for a loan and gives instructions on how to apply for the loan. ( Id.) . . . In effect, the presumption of receipt “resolves the ‘swearing contest’ where one party claims to have mailed a document and the other party claims it does not have the document.” Id. (citing Schikore, 269 F.3d at 963). “[T]he presumption of mailing can only be rebutted by actual evidence of non-receipt.” Id. (citing Chavez v. Bank of America, No. C 10–653, 2011 WL 4712204, at *6 (N.D.Cal. Oct. 7, 2011)).  Southwestern provided evidence it is its business practice to engage third-parties to print and mail its firm offers of credit to consumers after obtaining consumer reports. ( See Decl. Yanjue Li.) Southwestern also provided evidence that firm offers of credit were mailed to Derderian following receipt of her consumer report. ( See id; Def.’s Exhs. A, B.) Derderian has not provided any evidence of non-receipt; she has only stated she “does not believe” or “does not recall” receiving the offers. (Plf.’s Opp’n at 1; Derderian Decl. ¶ 5.) In light of this evidence, the Court finds Southwestern provided sufficient evidence that it mailed firm offers of credit to Derderian to support a presumption that Derderian received the offers, and that Derderian failed to rebut this presumption. See Banga, 2013 WL 71772, at *12 (citing Schikore, 269 F.3d at 963).

The District Court found that FCRA imposed no time requirement to mail the Firm Offer of Credit.

Southwestern further contends that it is entitled to summary judgment because the FCRA does not impose any time requirement for extending offers of credit and Derderian’s case turns on whether there is such a time requirement.   After reviewing the relevant portions of the FCRA, the Court finds the FCRA does not contain a specific time requirement for extending offers of credit after obtaining consumer reports. Simply put, nowhere in the FCRA did Congress expressly or impliedly include a time provision for extending an offer of credit after obtaining consumer reports for that purpose. On the other hand, Congress did impose other specific requirements, including time requirements, in other portions of the FCRA with respect to extensions of firm offers of credit. For example, the FCRA dictates the type of information a creditor may obtain when someone requests a consumer report to make a firm offer of credit. See 15 U.S.C. § 1681b(c)(2). Additionally, the FCRA requires lenders maintain files on criteria used to select consumers to receive promotional offers of credit for three years from the date of the offer. See 15 U.S.C. § 1681m(d)(3).