In Pettye v. Santander Consumer, USA, Inc., 2016 WL 704840, at *3-4 (N.D.Ill., 2016), Judge St. Eve dismissed a TILA claim filed against an auto finance company because the disclosures regarding GAP complied with TILA or any violations were not apparent on the face of the disclosure statement.  

An assignee is liable only where the TILA violation appears on the face of the disclosure statement. See 15 U.S.C. § 1641(a) (assignees of original lender are liable “if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement”). . .  Here, Defendant Santander argues that debt cancellation fees, like the GAP fee at issue in this lawsuit, “may be excluded from finance charges if the following requirements are met: (A) The debt cancellation agreement or coverage is not required by the creditor, and this fact is disclosed in writing; (B) The fee or premium for the initial term of coverage is disclosed…; and (C) The consumer signs or initials an affirmative written request for coverage after receiving the disclosures specified in this paragraph.” Rivera, 274 F.3d at 1121 (quoting 12 C.F.R. § 226.4(d)(3)(i)); see also Rodriguez v. Lynch Ford, Inc., No. 03 C 7727, 2004 WL 2958772, at *10 (N.D. Ill. Nov. 18, 2004) (“Under TILA, all disclosures made under these requirements must also be clear and conspicuous.”). . . .First, on the face of GAP ADDENDUM, there is a stand alone paragraph above the signature line that states in all capital letters. . . This written disclosure – that was above the signature line and in all capital letters – clearly and conspicuously states that the GAP coverage is voluntary and not required to obtain credit, thus fulfilling the first Rivera requirement. . . .Next, the $895 fee for the GAP coverage is disclosed in writing on the face of the GAP ADDENDUM under the “charge for the addendum,” and is listed on the RIC as “PARTNERS GAP.” (Exs. A, B.) Last, Plaintiff signed (executed) the GAP ADDENDUM with these disclosures, as well as the RIC, which listed the cost of the GAP coverage. (Id.) Because there are no TILA violations apparent on the face of the assigned documents and the disclosures comply with the Rivera exception based on 12 C.F.R. § 226.4(d)(3), Defendant Santander – as an assignee – cannot be held liable for the inclusion of the $895 GAP fee in the “amount financed” section of the RIC. See Taylor, 150 F.3d at 694 (“Only violations that a reasonable person can spot on the face of the disclosure statement or other assigned documents will make the assignee liable under the TILA.”). The Court therefore grants Defendant Santander’s motion to dismiss Count I of the First Amended Complaint.

The District Court, however, allowed the ECOA claim to proceed as pleaded. 

Defendant Santander first argues that Plaintiff has failed to allege a prima facie case of disparate impact discrimination under the ECOA. Under the federal pleading standards, however, a plaintiff need not plead a prima facie case because it is an evidentiary standard, not a pleading requirement. See Swierkiewicz v. Sorema, 534 U.S. 506, 510, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002); Luevano v. Wal–Mart Stores, Inc., 722 F.3d 1014, 1028 (7th Cir. 2013) (“Neither Iqbal nor Twombly overruled Swierkiewicz, and it is our duty to apply the Supreme Court’s precedents unless and until the Supreme Court itself overrules them.”). . . Turning to its other arguments, in its opening brief, Defendant generally contends that Plaintiff has failed to identify a specific policy or practice underlying her disparate impact claim. See Smith, 544 U.S. at 241; Hoffman, 589 F.Supp.2d at 1011. Plaintiff, on the other hand, maintains that she has alleged a specific, facially neutral practice, namely, that Defendant Santander’s discretionary credit pricing policy and practice, although facially neutral, has a disproportionately negative effect on African-American women. (First Am. Compl. ¶ 158.) Plaintiff further alleges that the specific pricing and markup policies involve discretionary non-risk related charges or add-ons, such as the GAP Addendum, and that, as applied, the average add-ons imposed on African-American women were significantly greater than on white consumers. (Id. ¶¶ 28, 159.) In addition, Plaintiff alleges that “the disparities between the terms of the credit transactions involving African-American women and the terms involving white consumers, and white men specifically, could not have occurred by chance and cannot be explained by factors unrelated to race and gender.” (Id. ¶ 160; see also ¶¶ 29-31.) Plaintiff specifically alleges that she is challenging “Santander’s practices of permitting dealer rate markups and paying dealers ‘reserve’ or ‘participation’ for negotiating such markups, and encouraging and incentivizing dealerships to impose rate markups and add-ons.” (Id. ¶ 162(a); see also ¶¶ 29, 32.)  Based on these allegations, Plaintiff has sufficiently alleged – with the requisite specificity – two aspects of Defendant’s credit pricing and mark-up policies that she is challenging, namely, the discretionary non-risk related charges or add-ons and the financial incentives for interest rate markups. Nevertheless, in its reply brief, Defendant argues that Plaintiff failed to allege that she was subjected to these specific policies and that these policies harmed her.3 At this procedural posture, the Court accepts Plaintiff’s allegations as true and construes them in the light most favorable to Plaintiff, not Defendant. See Thulin, 771 F.3d at 997. Under the circumstances, Plaintiff has provided a sufficient factual background showing that she was subject to these policies and injured as a result of them, including that she paid an inflated interest rate in financing her car and paid for a GAP insurance policy that she alleges is worthless. (Id. ¶¶ 83, 85-89, 92-98, 103, 106, 164.)  Next, Defendant takes issue with Plaintiff’s general use of statistics to support the second element of her disparate impact claim. Defendant Santander specifically argues that “general statistics are not enough alone to establish a prima facie claim for disparate impact under the ECOA.” (R. 23, Def.’s Open. Brief, at 14.) There is no doubt that statistical evidence is often used to prove disparate impact claims. See International Bhd. of Teamsters v. United States, 431 U.S. 324, 340, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); A.B. & S. Auto Serv., 962 F. Supp. at 1061. At this stage of the proceedings, however, Plaintiff need not “prove” her claim, especially because she has sufficiently alleged facts that Defendant’s specific policies harmed her by causing her to pay more for her interest rate and for add-ons than individuals who are not African-American women. See, e.g., Steele v. GE Money Bank, No. 08 C 1880, 2009 WL 393860, at *4 (N.D. Ill. Feb. 17, 2009). As the district court in Steele observed in the context of the defendants’ arguments regarding statistical disparities, the “court declines to impose a strict fact-pleading requirement on the plaintiffs as the basis of the plaintiffs’ disparate impact claim is clear, and it is supported by sufficient factual allegations to withstand a motion to dismiss.” Id.  Last, Defendant argues that Plaintiff has failed to sufficiently allege facts connecting these statistics to Defendant Santander or her actual credit transaction. Defendant’s argument misses the point because, as discussed, Plaintiff has adequately alleged the existence of a disparate impact claim without the use of statistics, although she does make factual allegations based on some statistics. See A.B. & S. Auto Serv., 962 F. Supp. at 1061 (“proof of disparate impact need not be shown by statistics in every case”) (citation omitted). As such, viewing the facts and all reasonable inferences in Plaintiff’s favor, she has sufficiently alleged that Defendant’s discretionary pricing policies result in African-American women experiencing worse credit loan outcomes when compared to the population at large. (First Am. Compl. ¶¶ 21, 22, 24.)  In sum, Plaintiff has alleged sufficient factual details stating an ECOA claim that is plausible on its face.