ORDER
KRISTINE G. BAKER, UNITED STATES DISTRICT JUDGE
Plaintiffs
the Bureau of Consumer Financial Protection
(“Bureau”) and the State of Arkansas
(“Arkansas”) ex rel. Leslie Rutledge
Attorney General, commenced this civil action on December 11
2020, to obtain permanent injunctive and monetary relief and
civil penalties from defendant Alder Holdings, LLC
(“Alder”). The Complaint alleges violations of
the Fair Credit Reporting Act (“FCRA”) §
615, 15 U.S.C. § 1681m, and Regulation V's rule
regarding Duties of Users Regarding Risk-Based Pricing
(“Risk-Based Pricing Rule”), 12 C.F.R. §
1022.70 et seq., in connection with the
defendants' selling of home-security and alarm system
monitoring services.
Plaintiffs
and Defendant agree to entry of this Stipulated Final
Judgment and Order, without adjudication of any issue of fact
or law, to settle and resolve all matters in dispute arising
from the conduct alleged in the Complaint.
THEREFORE
it is ORDERED:
FINDINGS
1. This
Court has jurisdiction over the parties and the subject
matter of this action under 12 U.S.C. § 5565(a)(1) and
28 U.S.C. §§ 1331, 1345.
2.
Venue is proper because Alder is located, resides, or does
business in this district. 12 U.S.C. § 5564(f).
3.
Defendant neither admits nor denies any allegations in the
Complaint, except that, for purposes of this Order, Defendant
admits the facts necessary to establish this Court's
jurisdiction over it and the subject matter of this action.
4.
Defendant waives all rights to seek judicial review or
otherwise challenge or contest the validity of this Order and
any claim it may have under the Equal Access to Justice Act,
28 U.S.C. § 2412, concerning the prosecution of this
action to the date of this Order. Each Party agrees to bear
its own costs and expenses, including, without limitation,
attorneys' fees.
5.
Entry of this Order is in the public interest.
6. The
following definitions apply to this Order:
a. “Consumer Report” has the
meaning provided in the FCRA, 15 U.S.C. § 1681a(d), and
any amendments thereto. As of the date of entry of this
Order, “Consumer Report” is defined under the
FCRA as any written, oral, or other communication of any
information by a consumer reporting agency bearing on a
consumer's credit worthiness, credit standing, credit
capacity, character, general reputation, personal
characteristics, or mode of living which is used or expected
to be used or collected in whole or in part for the purpose
of serving as a factor in establishing the consumer's
eligibility for (A) credit or insurance to be used primarily
for personal, family, or household purposes; (B) employment
purposes; or (C) any other purposes authorized under 15
U.S.C. § 1681b.
b. “Consumer Reporting Agency”
or “CRA” has the meaning
provided in the FCRA, 15 U.S.C. § 1681a(f), and any
amendments thereto. As of the date of entry of this Order,
“Consumer Reporting Agency” is defined under the
FCRA as any individual, partnership, corporation, trust,
estate, cooperative, association, government or governmental
subdivision or agency, or other entity that, for monetary
fees, dues, or on a cooperative nonprofit basis, regularly
engages in whole or in part in the practice of assembling or
evaluating consumer credit information or other information
on consumers for the purpose of furnishing consumer reports
to third parties, and which uses any means or facility of
interstate commerce for the purpose of preparing or
furnishing consumer reports.
c. “Credit” has the meaning
provided in the Equal Credit Opportunity Act
(“ECOA”), 15 U.S.C. § 1691a(d), and any
amendments thereto. As of the date of entry of this Order,
“Credit” is defined under ECOA as the right
granted by a creditor to a debtor to defer payment of debt or
to incur debts and defer its payment or to purchase property
or services and defer payment therefor.
d. “Creditor” has the meaning
provided in ECOA, 15 U.S.C. § 1691a(e), and any
amendments thereto. As of the date of entry of this Order,
“Creditor” is defined under ECOA as any
individual, corporation, government or governmental
subdivision or agency, trust, estate, partnership,
cooperative, or association that regularly extends, renews,
or continues credit or regularly arranges for the extension,
renewal, or continuation of credit; or any assignee of an
original creditor who participates in the decision to extend,
renew, or continue credit.
e. “Credit score” has the
meaning in the FCRA, 15 U.S.C. § 1681g(f)(2)(A), and any
amendments thereto. As of the date of entry of this Order,
“Credit score” is defined under the FCRA as a
numerical value or a categorization derived from a
statistical tool or modeling system used by any individual,
partnership, corporation, trust, estate, cooperative,
association, government or governmental subdivision or
agency, or other entity that makes or arranges a loan to
predict the likelihood of certain credit behaviors, including
default (and the numerical value or the categorization
derived from such analysis may also be referred to as a
“risk predictor” or “risk score”).
f. “Defendant” means Alder
Holdings, LLC and its successors and assigns.
g. “Effective Date” means the
date on which the Order is entered by the Court.
h. “Enforcement Director” means
the Assistant Director of the Office of Enforcement for the
Bureau, or his or her delegate.
i. “Material terms” has the
meaning in Regulation V, 12 C.F.R. § 1022.71(n), and any
amendments thereto. As of the date of entry of this Order,
“Material terms” is defined under Regulation V as
the financial term that varies based on information in a
consumer report and that has the most significant financial
impact on consumers, such as a deposit required in connection
with credit extended by a telephone company or utility or an
annual membership fee for a charge card.
j. “Materially less favorable”
has the meaning in Regulation V, 12 C.F.R. § 1022.71(o),
and any amendments thereto. As of the date of entry of this
Order, “Materially less favorable” under
Regulation V means, when applied to material terms, that the
terms granted, extended, or otherwise provided to a consumer
differ from the terms granted, extended, or otherwise
provided to another consumer from or through the same
individual, partnership, corporation, trust, estate,
cooperative, association, government or governmental
subdivision or agency, or other entity, such that the cost of
credit to the first consumer would be significantly greater
than the cost of credit granted, extended, or otherwise
provided to the other consumer. For purposes of this
definition, factors relevant to determining the significance
of a difference in cost include the type of credit product,
the term of the credit extension, if any, and the extent of
the difference between the material terms granted, extended,
or otherwise provided to the two consumers.
k. “Related Consumer Action”
means a private action by or on behalf of one or more
consumers or an enforcement action by another governmental
agency brought against Defendant based on substantially the
same facts as described in the Complaint.
l. “Risk-Based Pricing Notice”
is the notice that must be provided to a consumer under
Regulation V, 12 C.F.R. § 1022.72, when a person or an
organization, including a corporation, partnership,
proprietorship, association, cooperative, estate, trust, or
government unit both: (1) uses a consumer report in
connection with an application for, or a grant, extension, or
other provision of, credit to that consumer that is primarily
for personal, family, or household purposes; and (2) based in
whole or in part on the consumer report, grants, extends, or
otherwise provides credit to that consumer on material terms
that are materially less favorable than the most favorable
material terms available to a substantial proportion of
consumers from or through that person.
IT
IS FURTHER ORDERED that:
7.
Defendant and its officers, agents, servants, employees, and
attorneys, and all other persons or entities in active
concert or participation with any of them, who have actual
notice of this Order, whether acting directly or indirectly,
are hereby permanently restrained and enjoined from violating
§ 615(h) of the FCRA, 15 U.S.C. § 1681m(h), and the
Risk-Based Pricing Rule, 12 C.F.R. § 1022.70 et
seq.
8. If
Defendant (a) uses a consumer report in connection with an
application for, or a grant, extension, or other provision
of, credit to a consumer that is primarily for personal,
family, or household purposes, and (b) based in whole or in
part on the consumer report, grants, extends, or otherwise
provides credit to that consumer on material terms that are
materially less favorable than the most favorable material
terms available to a substantial proportion of consumers from
or through Defendant, then Defendant must:
a. Provide the consumer with a Risk-Based Pricing Notice
before consummation of the credit transaction.
b. Include in the Risk-Based Pricing Notice:
i. A statement that a consumer report (or credit report)
includes information about the consumer's credit history
and the type of information included in that history;
ii. A statement that the terms offered, such as the annual
percentage rate, deposit, or pre-payment requirements have
been set based on information from a consumer report;
iii. A statement that the terms offered may be less favorable
than the terms offered to consumers with better credit
histories;
iv. A statement that the consumer is encouraged to verify
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