In Fillinger v. Third Fed. Sav. & Loan Ass’n, No. 21-3088 (6th Cir. 2021), the Sixth Circuit held that an alleged denial of a loan is a sufficient injury to confer standing under Article III of the Constitution.
The plaintiff, Judy Fillinger, applied for a loan with Third Federal Savings and Loan Association (Third Federal) in August 2020. Fillinger’s application disclosed that Third Federal had foreclosed on a previous loan, causing the lender to request further information. Fillinger provided documentation of a bankruptcy case that discharged her debt in 2009, along with three foreclosure cases in 2010, 2012, and 2014. The 2010 case was dismissed for failure to prosecute, and the latter two cases ended with a ruling that Third Federal was not a party, and therefore had no obligation on the debt. After this disclosure, however, Third Federal denied Fillinger’s application on the grounds that “a previous real estate debt was settled for less than the full balance.”
In response to Third Federal’s decision, Fillinger filed suit alleging violation of the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA). Third Federal moved to dismiss the claims for lack of standing, asserting that Fillinger could not establish that she had suffered an injury based on the denial of her application. The U.S. District Court for the Northern District of Ohio agreed and dismissed Fillinger’s claims.
On appeal, the Sixth Circuit noted that, to satisfy the requirements for Article III standing, a plaintiff must demonstrate that (1) she suffered an injury that, in fact (2) was caused by the defendant, and which (3) can be redressed through a favorable judicial decision. Based on this standard, the court found that Fillinger’s complaint alleged a concrete injury — the denial of her loan application. Further, the court found that Fillinger alleged that the injury: (a) was caused by Third Federal when it committed the alleged FCRA and ECOA violations; and (b) could be redressed through a favorable judicial decision based on the remedies requested in the complaint. It therefore vacated the court’s decision and remanded the case for further proceedings.