Florida district courts hold that only credit repair organizations can be liable under the Credit Repair Organization Act

In Moret v. Select Portfolio Servicing, Inc., No. 08-61996-CIV (May 6, 2009, S.D. Fla.), a Florida District Court sided with its sister courts and an Alabama Bankruptcy Court when it held that only an entity qualifying as a credit repair organization has liability under the Credit Repair Organization Act (CROA). The plaintiffs in that case sued the loan servicer for credit reporting violations under § 1679b(a)(1) of CROA which, unlike other sections of CROA, prohibits conduct by any person as opposed to only credit repair organizations. In tossing the claim the District Court joined its sister courts in adopting the reasoning of an Alabama Bankruptcy Court which held that the suggestion that § 1679b(a)(1) does not require the defendant to be a credit repair organization is to read that section out of context. See, _Hyppolite v. Citi Residential Lending, Inc._, 2009 WL 11093 (S.D.Fla. Apr. 24, 2009) and _Lopez v. ML #£3, LLC,_ 607 F.Supp.2d 1310 (N.D.Fla. Apr. 15, 2009). The Bankruptcy Court in _In re Wright_, 2007 WL 1459475, (Bankr.N.D.Ala. May 16, 2007) observed that: Section 1679b(a)(1) should be construed within the context of the entire Act, including its codified findings and purposes, not as if § 1679b(a)(1) were a stand-alone statute. When it enacted CROA, the focus of Congress was on the credit repair industry, not enacting a federal cause of action creating liability for every person guilty of making defamatory statements about a consumer’s creditworthiness. Remedies for such wrongs are adequately provided for under state tort laws. This Court cannot assume Congress intended to add a federal question cause of action to the dockets of federal courts without some mention of its reasons for doing so in the codified findings and purposes or in the Act’s legislative history. The congressional findings, purposes and history only discuss the credit repair industry, nothing more. Compare this reasoning to that of the district courts in Illinois which read § 1679b(a)(1) literally to mean that persons other than credit repair organizations can be held liable under CROA. See, _Rodriguez v. Lynch Ford, Inc._, 2004 WL 2958772 (N.D.Ill. Nov. 18, 2004 _Parker v. 1-800 Bar None, a Financial Corporation, Inc._, 2002 WL 215530 (N.D.Ill. 2002 _Bigalke v. Creditrust Corporation_, 162 F.Supp.2d 996, 998 (N.D.Ill. 2001 _Vance v. National Benefit Assn._, 1999 WL 731764 (N.D.Ill. 1999).

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