Business Principals vs. Retail Bank

The Case: Business Principals vs. Retail Bank

The Issue: The downturn of the U.S. economy in 2008/2009 stressed the resources of many small business owners. But it’s a fact: when business owners miss payments on a small business loan, those late payments may generally be reported to the consumer credit agencies. As such, late payments will impact the credit scores of the credit principals. In this case, a controversial charge-off for a disputed high dollar amount was reported, and plaintiffs claimed damage to their credit reputations as a result.

Our Approach: The progression of delinquency levels that lead to a charge-off, and their impact on credit score and reputation, were central elements of the analysis. Credit reports and dispute resolution forms showing the progression from minor delinquency to charge-off were reviewed and interpreted, and credit scores and score factors before and after the reported charge-off were analyzed. Credit reports were also reviewed for evidence of other reflections of financial stress, such as late payments on auto loans and mortgages. Finally the role of charge-off amount in credit scoring was described and its impact evaluated. Expert testimony and opinions were provided both in deposition and at jury trial.

Consumer (Class Action) vs. Major Retail Bank

The Case: Consumer (Class Action) vs. Major Retail Bank

The Issue:  A leading U. S. retail bank has a practice of accessing and reviewing consumer credit reports associated with signators on deposit accounts. Attorneys for the class of individuals whose reports were so pulled claim the access caused damage to the credit of those individuals due to the recording of inquiries and the scoring of inquiries on subsequent credit reports. Is there really such “damage” to a credit score, and is there likely to be similar damage (if any) experienced by all individuals in the class?

Our Approach:  We outlined, in a written report, the role of inquiries in consumer credit reporting and how they differ from other elements of a credit report that are commonly reported to all three U. S. credit agencies. We illustrated how the presence of an incremental inquiry may or may not adversely impact a credit score, and how the level of impact, if there is one, may vary individual to individual. An expert report was developed, and opposing expert reports were critiqued. The reports were the subject of depositions completing our contribution to the case.

Mortgage Lender vs. Mortgage Insurer

The Case: Mortgage Lender vs. Mortgage Insurer

The Issue: A mortgage insurer maintains a practice of reviewing cases associated with defaulted loans – sometimes rescinding coverage when the loans were not apparently originated to agreed standards. Many of those standards relate to minimum consumer scores, scores associated with borrowers and co-borrowers, and scores accessed at various times from multiple credit bureaus at multiple points in time.

The question: in cases wherein scores met standards at one point in time but not at a later point in the application process, did the change reflect true degradation in credit standing? Was approving the loan a reasonable exception as called for in agreements between the lender and the insurer?

Our Approach: Credit reports associated with cases of rescinded coverage were examined for the root causes of score deterioration. In some cases, later scores reflected fuller information that should have been known at the time of loan approval. In others, score degradation was minor and reflective of events throughout the application and approval process itself. Case by case an opinion was rendered whether an exception was warranted, based on the individual circumstances as evidenced on credit reports. Similar opinions were developed by opposing experts; we reviewed and rebutted those reports. Written reports and presentation/testimony in an arbitration setting concluded our work.