## Facts

- Kim Williams applied by telephone for an MBNA American Express credit card on May 2, 2006.
- MBNA obtained Williams’s credit history electronically through Experian and evaluated the application using its underwriting criteria.
- MBNA denied the application.
- MBNA sent Williams a written adverse-action notice stating the application was denied because (1) she had “sufficient balances on her revolving credit lines,” and (2) she had “sufficient credit available based on her income.”
- Williams sued under the Equal Credit Opportunity Act (ECOA), alleging the notice’s stated reasons were confusing and inconsistent and therefore not a “statement of specific reasons” for the denial.
- MBNA moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

## Issues

1. Whether the alleged adverse-action notice satisfied ECOA and Regulation B by providing a written “statement of specific reasons” that indicates the principal reasons for the credit denial.
2. Whether, accepting the complaint’s allegations as true, Williams plausibly stated an ECOA notice-violation claim sufficient to survive a Rule 12(b)(6) motion.

## Decision

- The court denied MBNA’s Rule 12(b)(6) motion to dismiss.
- The court held that Williams plausibly alleged the notice failed to provide a clear and specific statement of principal reasons for the adverse action as required by ECOA and Regulation B.
- The court concluded that, on the pleadings alone, it could not decide as a matter of law that MBNA’s stated reasons were sufficiently understandable to the applicant.

## Legal Principles

- ECOA requires a creditor taking adverse action to provide the applicant a written statement of reasons that is specific.  
- Regulation B requires the statement to be specific and to indicate the principal reasons for the adverse action; the creditor need not explain how or why a factor affected the decision, but must identify the principal reasons.
- The adequacy of an adverse-action notice is evaluated functionally: whether the stated reasons reasonably allow an applicant to understand the basis for the denial and facilitate oversight of potentially discriminatory practices.
- At the motion-to-dismiss stage, a claim may proceed where the alleged reasons, though phrased as “reasons,” plausibly could be viewed as unclear, confusing, or contradictory in context, making compliance a fact-dependent question not suitable for dismissal.

## Conclusion

The court allowed the ECOA claim to proceed because the complaint plausibly alleged that MBNA’s adverse-action notice did not provide an understandable, specific statement of the principal reasons for denying credit, making dismissal under Rule 12(b)(6) improper.


Williams v. MBNA Am. Bank, N.A., 538 F. Supp. 2d 1015 (E.D. Mich. 2008)