Consumer Protection – FCRA claims against bank are dismissed

Where a customer failed to plead facts making it plausible that a bank provided inaccurate or incomplete information to credit reporting agencies, his Fair Credit Reporting Act claims against the bank were dismissed.

Background

Kemonty Harvey alleges that he executed a financing agreement with USAA Federal Savings Bank, in conjunction with plaintiff’s attempted purchase of a vehicle that—despite transmission of the purchase funds by USAA—was never ultimately delivered to plaintiff. Plaintiff alleges that defendant failed to conduct a reasonable investigation after he disputed information appearing on his credit report related to the vehicle loan, resulting in the continued furnishing of inaccurate information to credit reporting agencies, or CRAs, in violation of the Fair Credit Reporting Act, or FCRA.

USAA has filed a motion to dismiss. Defendant’s dispositive dismissal argument as to both counts turns on whether plaintiff has plausibly alleged that defendant furnished inaccurate information to the CRAs, to begin with—a threshold requirement for stating a claim under any part of § 1681s-2(b).

Section 1681s-2(b) claim

To state a claim under any subpart of § 1681s-2(b), a plaintiff must first “identify[] inaccurate or incomplete information that the furnisher provided to the reporting agency.” Generally speaking, “inaccurate” information for purposes of the FCRA includes information that is both patently inaccurate or information that is “misleading in such a way and to such an extent that it can be expected to have an adverse effect.”

Here, whether the reported loan account information was actionably inaccurate turns on whether plaintiff’s dispute regarding the loan account information involves objectively and readily verifiable information. The court finds that it does not, and therefore it is not actionably inaccurate.

Plaintiff’s challenge to the reported information relies on the argument that the underlying debt never materialized because the purpose of the loan was frustrated by fraud, thus absolving him of his obligation to repay the disbursed funds. The court finds that plaintiff’s arguments concerning whether his receipt of the intended vehicle constituted a condition precedent to the underlying loan agreement is a legal question of contract interpretation, not an objectively verifiable fact.

It would be unreasonable to charge a layperson with reviewing the loan agreement to determine whether—despite the absence of language on the face of the loan agreement providing for a specific fraud-by-the-seller repayment release—the agreement nevertheless allowed for plaintiff to be relieved of his repayment obligation in such an instance. Such unresolved legal disputes “render[] [plaintiff’s] claim non-cognizable under the FCRA.”

Accordingly, because the question of whether plaintiff owes defendant repayment of the loan under the terms of the loan agreement despite the fraud/misdirection of the loan funds is a dispute that turns on bespoke legal analysis, not objectively and readily verifiable information, the court cannot find that the reported loan account constituted actionably “inaccurate” information for purposes of the FCRA. And without such an inaccuracy, plaintiff has failed to state a claim on either of his FCRA claims.

Defendant’s partial motion to dismiss granted.

Harvey v. USAA Federal Savings Bank, Case No. 3:25-cv-155, April 13, 2026. EDVA at Richmond (Young). VLW 026-3-180. 12 pp.

Full-Text Opinion

VLW 026-3-180
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