Consumer Law & Policy Blog

Supreme Court Grants Fair Credit Reporting Act Petitions

by Scott Nelson

The Supreme Court granted two cases this morning, Safeco v. Burr and GEICO v. Edo, which present the question whether a "willful" violation of the Fair Credit Reporting Act (FCRA) can be established by proof that the defendant recklessly disregarded the law.  The cases arise from a set of related cases in which the Ninth Circuit, following Third Circuit precedent under FCRA as well as Supreme Court precedents interpreting other statutes with willfulness requirements, held that reckless disregard would suffice and remanded for discovery and, ultimately, decisions on whether the defendants' conduct met that standard. (We mentioned these cases last week, in a post previewing the Court's "long conference.")

The defendants in the cases sought Supreme Court review based largely on the Ninth Circuit's statement that it disagreed with an Eighth Circuit decision requiring knowing disregard of legal requirements to satisfy the willfulness standard.

There were a number of reasons we had hoped the Court would choose to deny certiorari, including distinctions among the cases in the different circuits and the absence of a developed factual record to frame the issue of willfulness.  (Here's our Brief in Opposition.)  Nonetheless, the Court's decision to hear the cases is not terribly surprising in light of the Ninth Circuit's express statement that it was choosing to side with the Third Circuit over the Eighth on the willfulness issue.

Senate Banking Hears Testimony on Predatory Lending to Military

by Chris Peterson

Yesterday in Washington, D.C. the Senate Banking Committee held a hearing on predatory payday lending to military personnel. The issue creates some interesting political dynamics, with many conservatives taking offense at loans to marines, sailors, and other members of the military with intrest rates of between 390 and 900%. As far as committee meetings go, the hearing is pretty fun to watch (which admittedly is not saying much). A video can be easily watched on the Senate banking committee website. Here's a link.

Some of the highlights: At minute 1:29:50 Senator Mel Martinez (R-FL) aggressively questions the president of the payday loan bar association ("Q: Do you think an 18-year-old taking out a 390% loan is conscionable; can you really, with a straight face tell me, that that is actually what you believe?"). At minute 1:06:26 Lynn Drysdale, a widely respected consumer lawyer from Jacksonville, Florida, shares some of the horror stories of her clients. And, somewhere around minute 1:20:50, I speculated that George Washington probably would not have tolerated 500% interest rate loans to the Continental Army.

A fun time was had by all--or at least by me.