## Facts

- Terry S. Fischl applied through a New Orleans BMW dealer to finance $12,000 of a $15,000 vehicle purchase.
- The dealer communicated the application information to General Motors Acceptance Corporation (GMAC), which transcribed it onto GMAC forms.
- GMAC obtained and considered a consumer credit report from a local credit reporting agency.
- Fischl’s application materials reflected home ownership, a monthly mortgage payment, two sales jobs with roughly $4,000 monthly income, and multiple credit references.
- The consumer report contained inaccuracies, including mischaracterizing current employment and mislabeling a Sears account.
- GMAC’s credit supervisor concluded Fischl’s credit history lacked sufficient duration/extent and did not show sustained payments comparable to the proposed loan obligation, and GMAC denied the requested credit level.
- GMAC sent an adverse-action notice stating only that Fischl was denied because his “credit references were insufficient.”
- The notice did not state that the decision was based in whole or part on information from a consumer reporting agency and did not identify the agency.
- Fischl sued under the Equal Credit Opportunity Act (ECOA) and Regulation B for failure to provide specific reasons, and under the Fair Credit Reporting Act (FCRA) for failure to provide required consumer-report disclosures.
- After a bench trial, the district court entered judgment for GMAC; Fischl appealed.

## Issues

1. Whether an adverse-action notice stating only that “credit references were insufficient” satisfies ECOA and Regulation B’s requirement of “specific reasons” for denial.
2. Whether GMAC violated the FCRA by failing to disclose that the denial was based in whole or part on a consumer report and by failing to identify the consumer reporting agency.

## Decision

- The Fifth Circuit reversed and remanded.
- The court held GMAC’s ECOA/Regulation B notice was not sufficiently specific; “credit references were insufficient” was too general to explain the principal basis for denial.
- The court held GMAC violated the FCRA by failing to disclose that a consumer report was used in the adverse decision and by failing to identify the reporting agency.
- The case was remanded for further proceedings, including determination of appropriate relief.

## Legal Principles

- Under ECOA and Regulation B, a creditor taking adverse action must provide a statement of reasons that is specific enough to permit an applicant to understand the principal grounds for the decision and respond appropriately.
- Conclusory or boilerplate adverse-action explanations (e.g., “insufficient credit references”), without meaningful detail, do not satisfy the ECOA/Regulation B specificity requirement.
- Under the FCRA, if credit is denied based in whole or in part on information from a consumer reporting agency, the creditor must disclose that a consumer report was used and must identify the agency.
- FCRA adverse-action disclosures are intended to allow consumers to locate and correct inaccuracies in consumer reports that may have affected the credit decision.

## Conclusion

The Fifth Circuit required meaningful specificity in ECOA adverse-action reasons and enforced the FCRA mandate to disclose consumer-report use and identify the reporting agency when a credit denial relies, even partly, on a consumer report.


Fischl v. Gen. Motors Acceptance Corp., 708 F.2d 143 (5th Cir. 1983)