Whether a typical HOA assessment qualifies as an FCRA 'credit transaction'

QUESTION PRESENTED This case asks whether a typical HOA assessment qualifies as an FCRA “credit transaction” that authorizes an HOA to obtain a homeowner’s credit report. The Fair Credit Reporting Act (“FCRA”) allows credit reporting agencies to furnish reports “in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the . . . collection of an account.” 15 U.S.C. § 1681b(a)(3)(A). The term “credit” means 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.” 15 U.S.C. §§ 1681a(r)(5); 1691a(d). There is a circuit split regarding the standard for determining whether a transaction involves “credit.” In 1984, the Ninth Circuit held that any transaction in which payment is deferred is “credit.” The Second, D.C., and Seventh Circuits have all subsequently held that when payment is substantially contemporaneous with performance, there is no “credit transaction” even if there are deferred payments. The question presented is: Whether all transactions involving deferred payment, even if payment is_ substantially contemporaneous with performance, are “credit transactions” under the FCRA.