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Paula Hussey-Head and her husband David purchased a home on Sorrell Lane in Rolling Hills Estates. Hussey-Head borrowed $540,000.00 from World Savings and Loan, signed a note, and secured the loan with a deed of trust on the property. Three years later, Hussey-Head sold the property to Louie and Frances Dileva. The Dilevas assumed the loan, and World Savings released Hussey-Head from all liability under the note and deed of trust. Several years later, the Dilevas began having financial problems, were unable to make their mortgage payments, and eventually defaulted on the loan. The trustee recorded a notice of default and election to sell under the deed of trust. Around that time, the three major credit bureaus5 began reporting that Hussey-Head was delinquent on the loan. Hussey-Head was unsuccessful in her repeated attempts to get World Savings to correct the reporting errors.

Hussey-Head brought suit against World Savings under the CCRAA for furnishing false and misleading information to the credit bureaus. The Court of Appeals reversed the trial court's granting of summary judgment in favor of World Savings, and remanded the case back to the trial court. Hussey-Head presented expert evidence that World Savings did not conform to industry standards in formatting the monthly digital tapes it sent to the credit bureaus; specifically, by failing to indicate that another party had assumed Hussey-Head's loan. Based on this evidence, summary judgment in favor of World Savings was improper.

Of greater significance, the court rejected World Savings' argument that federal law preempted the CCRAA. Regulation 560.2,6 promulgated by the Office of Thrift Supervision (OTS), authorized the OTS to enact regulations that "preempt state laws affecting the operation of Federal Savings Associations. "World Savings argued that because OTS occupies the entire field of lending regulation," any claims against it under state law are necessarily preempted. The appellate court disagreed. Citing prior decisions, the court agreed that state regulations that affect a "lending decision or affects a necessary step in the lending process" are preempted by the OTS. However, the court ruled that the doctrine of preemption does not extend to state laws that regulate conduct that is "voluntarily assumed" by a lender. In essence, the appellate court found that because the reporting of credit information is an incidental rather than necessary lending activity, federal preemption did not apply.

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