- Case
- Mader v. Experian Information Solutions, Inc.
- Court
- U.S. Court of Appeals for the Second Circuit
- Citation
- 56 F.4th 264 (2d Cir. 2023) (Nos. 20-3073, 21-2171)
- Decided
- January 4, 2023
- Bottom line
- A bureau usually will not be liable for reporting a debt whose discharge depends on an unsettled legal question, but a clear court order or settled law can change that.
Background
The FCRA requires a credit bureau to “follow reasonable procedures to assure maximum possible accuracy” of the information in a consumer’s report. 15 U.S.C. § 1681e(b). A consumer suing under that section must first show the report was inaccurate.
In 2008, Michael Mader took out an $18,000 private loan from Sallie Mae to attend a seminary that was not eligible for federal student aid. The loan was later transferred to Navient. Mader filed a Chapter 7 bankruptcy in 2012 and listed the loan. The 2013 discharge order released him from “all dischargeable debts” but did not say whether this loan was one of them. Navient told him the loan survived bankruptcy, and Mader signed a loan modification and made payments for several years.
Whether the loan was discharged turned on Bankruptcy Code § 523(a)(8)(A)(i), which generally excepts from discharge an educational loan “made under any program funded in whole or in part by a governmental unit or nonprofit institution.” In 2019, without first disputing the debt with Experian, Navient, or the bankruptcy court, Mader sued Experian, alleging it inaccurately reported the loan as still owed. The district court found the loan non-dischargeable and granted summary judgment to Experian.
What the court held
The Second Circuit (Judges Lohier, Carney, and Nathan; opinion by Judge Nathan) affirmed, but on a different ground. It first said the district court was wrong to treat the funding question as undisputed: Mader had produced a Navient investor prospectus describing the loan program as privately funded, which created a genuine dispute of fact.
The court then held that the claimed error was not the kind the FCRA reaches. Reading “accuracy” by its ordinary meaning, the court said, “This definition requires a focus on objectively and readily verifiable information.” Mader’s claim did not meet that test. No order specifically discharged the loan, both Navient and Mader had treated it as owed, and the answer depended on an unsettled question about what counts as a qualifying “program,” on which bankruptcy courts had disagreed. In the court’s words, “The bespoke attention and legal reasoning required to determine the post-bankruptcy validity of Mader’s debt means that its status is not sufficiently objectively verifiable to render Mader’s credit report ‘inaccurate’ under the FCRA.”
The court drew a limit. It said bureaus can still be required to report information “derived from the readily verifiable and straightforward application of law to facts,” citing decisions holding that misreporting the clear effect of a discharge order is actionable. “What the FCRA does not require, however, is that credit reporting agencies resolve unsettled legal questions like the one at issue here.” The court noted Mader could dispute directly with Navient, which has its own FCRA accuracy duties, or ask the bankruptcy court to decide whether the loan was discharged. If a court specifically ruled the loan discharged and a bureau kept reporting it as owed, the court said, “that would present a very different case in terms of cognizability under the FCRA.”
Our take
Mader reaches a defensible result on unusual facts. Mader paid on the loan for years and never disputed it before suing. Asking a credit bureau to decide a contested question of bankruptcy law that the bankruptcy courts themselves had not settled is a lot to ask.
The more important part of the opinion is its limit. The court did not adopt a blanket rule that “legal” errors are never actionable. Six months later, in Sessa v. Trans Union, the same court confirmed that reading and rejected any threshold legal-versus-factual test. The Eleventh and Fourth Circuits later adopted similar “objectively and readily verifiable” standards for furnisher claims. Bureaus and lenders will cite Mader to resist any claim that touches a legal question; we read it as limited to questions that are genuinely unsettled.
What it means if your report is wrong
If you believe a debt was discharged in bankruptcy but it still shows a balance, act on several fronts. Dispute the account in writing with each credit bureau and directly with the lender or servicer, and include your discharge order. If the creditor insists the debt survived, consider asking the bankruptcy court for a ruling on dischargeability; a specific court order makes the error far easier to prove. Private student loans are not always protected from discharge, so the answer may depend on how the loan was made and funded.
A free case review can assess how this ruling affects a claim, and there is no fee unless we win.
Sources
Primary
Commentary we reviewed
Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.