Bureau of Consumer Fin. Prot. v. Alder Holdings, LLC, 4:20-cv-01445-KGB

• Court: United States District Courts. 8th Circuit. United States State District Court of Eastern District of Arkansas
• Writing for the Court: KRISTINE G. BAKER, UNITED STATES DISTRICT JUDGE
• Parties: BUREAU OF CONSUMER FINANCIAL PROTECTION AND THE STATE OF ARKANSAS PLAINTIFFS v. ALDER HOLDINGS, LLC DEFENDANT
• Decision Date: 04 August 2021
• Docket Number: 4:20-cv-01445-KGB

BUREAU OF CONSUMER FINANCIAL PROTECTION AND THE STATE OF ARKANSAS PLAINTIFFS
v.
ALDER HOLDINGS, LLC DEFENDANT

No. 4:20-cv-01445-KGB

United States District Court, E.D. Arkansas, Central Division

August 4, 2021

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.

DEFINITIONS

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

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