Kingery v. Quicken Loans

(S.D. West Virginia, Charleston Division)

Date of Opinion: June 04, 2014

Facts: Plaintiff sent a loan inquiry in April 2010 to who identified Quicken Loans, among others, as a potential lender. Quicken uses a software for their inquiry process, Loan Origination and Lead Allocation “LOLA”, to track, deliver and find mortgage leads. A lead is when a consumer contacts Quicken via inquiry, phone, or online. The lead’s contact information is sent to a mortgage banker, whom contacts the lead to ask permission to pull a credit report. LOLA then contacts third party vendors to obtain three credit scores and stores them in its database.

If a banker chooses to deny the loan there will be a drop down menu where they select the reason why, such as credit score or foreclosure. If the banker decides to transfer the lead than an “Evening Escalation” program will send the lead to a software named “Second Voice”. The lead is only submitted to Second Voice if the credit score is higher than 640. Plaintiff’s score was obtained by a mortgage banker from Quicken, who turned her down for the loan.

The banker claims she was denied primarily because of a foreclosure on her property. There was no mention of her credit score as a deciding factor for the home loan.

• The Meaning of “Use” under the Fair Credit Reporting Act (FCRA): The disclosure requirement under Section 1681g(g)(1) is triggered from “use” of a consumer credit score by a lender in connection with an application initiated by the consumer.

Plaintiff claims that Quicken used her score by obtaining her reports, generating a middle score, and storing it in their database.  Quicken claims using a credit score means giving it consideration with respect to credit applications, not solely obtaining the score.

The court relied on Black’s Law Dictionary for the meaning of use, which was defined as the application or employment of something. The court also looked to Section 1681g(g)(1)(D) of the FCRA to discern the definition of use. The FCRA described use to mean using disclosures to obtain a loan, determine interest rate and essentially active employment of the score. Therefore, the court concluded that “use” as defined by Black’s Law Dictionary and the FCRA occurs when a credit score is utilized to achieve a purpose.

Quicken’s software does not generate a middle score, otherwise it would be considered use, it merely orders scores from low to high. Plaintiff’s credit score was also never transferred to Second Voice which would have constituted use. In denying her application for a mortgage, the banker testified he denied Plaintiff because of a foreclosure on her credit report not her credit score.

Plaintiff attempted to create an issue of fact using an expert witness, a loan officer for many years, to testify that any mortgage banker would have considered a credit score. The court found this testimony was unhelpful to the jury since Plaintiff’s expert was not knowledgeable in regards to Quicken’s practices. Motion for Summary Judgment granted.

For more information about consumer rights under the Fair Credit Reporting Act (FCRA) contact attorney Micah Adkins.