Commission approval of amicus brief filing: The Commission has approved the filing of an amicus brief in the currently pending case Whitfield et al v. Radian Guaranty, Inc., No. 05-5017 (3d Cir.). The brief addresses a lower court ruling that held that a mortgage company was not required to provide a consumer with a Fair Credit Reporting Act (FCRA) adverse action notice even though, as a result of the information in a consumer report, the company had charged a higher mortgage insurance premium, and that premium was paid by the consumer. The district court based its holding on the fact that the lender, not the consumer, obtained the policy and was the policy’s beneficiary.
In the brief, FTC staff urges the Third Circuit to overturn the lower court’s decision, stating that it erred by ignoring the adverse action notice requirement imposed by Section 615 of the FCRA on users of consumer reports. The brief argues that setting a higher initial rate for a mortgage constitutes “adverse action,” as that term is defined in the FCRA. The brief then points out that Section 615 of the FCRA requires a user to provide a consumer with an adverse action notice whenever that user takes adverse action “with respect to” that consumer. Even though the consumer was not the policy's beneficiary, Radian’s action was “with respect to” the consumer because the consumer was required to pay the higher insurance premium.
The Commission vote approving the filing of the amicus brief was 5-0. A copy of the brief can be found as a link to this press release and on the FTC’s Web site. (FTC File No. P062104; the staff contact is Lawrence DeMille-Wagman, Office of General Counsel, 202-326-2448.)
Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.