In Mitchell v. Specialized Loan Servicing LLC, 2022 WL 17883609 (9th Cir. Dec. 23, 2022), the Ninth Circuit affirmed the district court’s dismissal of FCRA and related state law claims based on a mortgage servicer’s alleged failure to report the account as current in the payment history profile on the consumer’s credit report.

Plaintiff filed a putative class action asserting FCRA and state law claims based on the mortgage servicer’s allegedly inaccurate credit reporting. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES) amended the FCRA and required furnishers to “report the [consumer’s] credit obligation as current,” if the furnisher provided forbearance relief. Plaintiff alleged that he sought and received forbearance relief due to the negative impact of the COVID-19 pandemic. During the forbearance plan, the mortgage servicer reported the account as current with no past due balance. In the payment history profile, however, the mortgage servicer used the code “D,” which means no payment history, no data, or unknown. Plaintiff asserted that the mortgage servicer should have used the code “0,” which means “0 payments past due (current account).”

Addressing the plaintiff’s FCRA claim, the Ninth Circuit found that the mortgage servicer complied with the FCRA by reporting the account status as current. The Ninth Circuit acknowledged that the Consumer Data Industry Association’s (CDIA) guidance provides that using code “D” is an acceptable option when reporting the account status as current and, therefore, using code “D” in the payment history profile did not violate the FCRA’s requirement to report the account as current. As a result, the Ninth Circuit held that the plaintiff could not make a prima facie showing that the mortgage servicer’s credit reporting was inaccurate to support a FCRA claim.

The Ninth Circuit also found that the plaintiff failed to present evidence of actual damages to support his FCRA claim. The plaintiff attempted to show that the mortgage servicer’s inaccurate reporting prevented him from refinancing his vehicle. However, the record showed that the credit denials were related to the plaintiff’s prior bankruptcy, not the mortgage servicer’s credit reporting. Thus, the Ninth Circuit affirmed the dismissal of the plaintiff’s FCRA and related state law claims for this additional reason.

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