Lender Litigation Alert -                 back to articles
California Law
California Consumer Credit Reporting Statute
Not Preempted by Federal Law

Hussey-Head v. World Savings & Loan Ass'n,
2003 DJDAR 9801

by Stefan S. Lawrence and Jonathan M. Zak
WRIGHT, FINLAY& ZAK, LLP
 
After a string of excellent results with preemption arguments, World Savings finally lost one. The second appellate district recently ruled that a savings and loan association may be liable for failing to correct inaccurate information concerning its borrower. The Court, in denying the lender's motion for summary judgment, rejected a federal preemption defense and concluded that a triable issue of material fact existed concerning the manner in which the lender disseminated information about plaintiff borrower to the credit agencies.

The California Consumer Credit Reporting Agencies Act (CCRAA)1 prohibits a person from furnishing information that he knows is incomplete or inaccurate to a credit bureau.2 In addition, a creditor may not submit negative credit information without notifying the affected consumer.3 Violation of the CCRAA supports a civil action for damages and other relief.4

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