On July 30, the U.S. Court of Appeals for the 7th Circuit affirmed the dismissal of a consumer’s suit against a consumer reporting agency (CRA), holding that the consumer failed to allege a factual inaccuracy under the FCRA. The consumer executed a deed in lieu of foreclosure on her mortgage in 2016 and received a Chapter 13 bankruptcy discharge in 2018. The reporting agency’s credit report reflected both events and noted a $145,952 mortgage balance and a $67,209 balloon payment due in December 2055. The consumer alleged that the CRA violated the FCRA by conveying a misleading impression of her credit status because it reported her bankruptcy as discharged while also listing the mortgage account as an outstanding obligation, and that the CRA failed to follow reasonable procedures to assure maximum possible accuracy. The district court dismissed the complaint, reasoning that resolving whether the mortgage had been discharged required legal analysis rather than verification of objectively ascertainable facts, particularly because the discharge order did not reference the mortgage debt and cautioned that determining the scope of a discharge could require legal analysis.

On appeal, the 7th Circuit agreed, explaining that the FCRA requires CRAs to follow reasonable procedures to assure maximum possible accuracy but does not require them to resolve legal questions that exceed their competencies. Because the discharge order was silent as to the mortgage account and expressly cautioned that determining coverage could require legal analysis, the court held that the discharge status of the mortgage was not an objective fact apparent from the order’s face. The court noted that whether the debt had been discharged depended on legal determinations regarding the deed in lieu of foreclosure and the discharge order that exceeded the agency’s obligations under the FCRA. The court affirmed, adding that its holding was limited to the facts presented and did not foreclose future FCRA claims involving unambiguous legal documents or apparent inconsistencies.