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NAFCU joined with several other organizations Wednesday to file an amicus brief with the U.S. Court of Appeals for the Eleventh Circuit arguing that the Fair Credit Reporting Act (FCRA) requires furnishers and consumer reporting agencies (CRAs) to investigate factual inaccuracies, not legal disputes. The brief is in response to one filed by the CFPB in December that argues data furnishers and CRAs should investigate legal disputes in addition to factual disputes.

The amicus brief filed by NAFCU and the other groups is in support of Holiday Day Inn Club Vacations Inc. in two separate lawsuits filed by consumers – consolidated for the appeal – who purchased timeshares through the company.

Both plaintiffs made some monthly payments before stopping payments and notified Holiday Inn of their intent to no longer pay in attempts to cancel the contracts. The consumers’ credit reports subsequently showed delinquencies and past-due balances. The consumers disputed their reports with Experian, which in turn sent notice of the disputes to Holiday Inn. Holiday Inn certified the information on the consumers’ credit reports as accurate.

The district courts for each of the cases granted summary judgment in favor of Holiday Inn, noting that these are legal contractual disputes, not factual issues that would support an FCRA claim.

In the amicus brief, NAFCU and the groups outlined that the FCRA’s structure, purpose, and history confirm that Congress’s intent for the FCRA was for factual accuracy, not for legal disputes. In addition, the groups highlighted that adopting the CFPB’s approach is un-administrable because furnishers and CRAs are neither qualified nor obligated to resolve legal disputes.

This is the third amicus brief NAFCU and other organizations have filed in similar cases; the other two cases were Gia Sessa v. TransUnion, LLC and Milgram v. Chase Bank. The association in December also filed an amicus brief with the U.S. Supreme Court related to FCRA preemption over state law.

NAFCU will continue to monitor FCRA regulations and litigation and share updates with credit union members.