Recently, the U.S. District Court for the Southern District of New York
opined on a bank’s motion for partial summary judgment, granting the motion as to whether the bank “knowingly” violated the FCRA but denying whether the bank acted “recklessly.” The complaint originated when the individual plaintiff opened a credit card and the plaintiff, along with other cardholders, was enrolled in a disaster relief program (DRP) that provided short-term relief for customers negatively impacted by the Covid-19 pandemic. The plaintiff alleged that the bank reported an outstanding account balance to the credit bureaus as delinquent despite promising that the balance would not be reported due to the protections of the DRP. Upon discovering this, the plaintiff disputed the reporting with the bank. The bank then investigated the plaintiff’s payment history, concluding that there had been no error because there was in fact an outstanding delinquent balance. The plaintiff eventually filed complaints with the CFPB in 2022 and proceeded to file suit later that year.
The bank argued it did not “knowingly” violate the FCRA. The court agreed and found the bank could not be “consciously aware” that a violation would come about as a result of its investigation, concluding the bank is entitled to summary judgment on whether it “knowingly” violated § 1681s-2(b) of FCRA.