Alert March 25, 2008

Federal Appeals Court Finds Creditor’s Pre-Screened Letter Meets FCRA Firm Offer Requirements

The First Circuit has held that the Fair Credit Reporting Act does not require a prescreened mailing to include specific credit terms, such as an interest rate, in order to qualify as a “firm offer of credit.” In Sullivan v. Greenwood Credit Union, the Court analyzed both the statutory definition of “firm offer of credit,” which does not require that a prescreened mailing include specific credit terms, and the overall statutory scheme, which contemplates subsequent communications between the lender and consumer to develop the specific terms of credit. The Court distinguished the Seventh Circuit’s 2004 decision in Cole v. U.S. Capital, Inc., as limited to circumstances in which the purported offer of credit is merely a sham used in an attempt to sell the consumer a non-credit product. Click here for a copy of Sullivan v. Greenwood Credit Union, No. 07‑2354 (1st Cir. March 19, 2008).