Banking and Finance Law Daily Wrap Up, FAIR CREDIT REPORTING—8th Cir.: Mortgage servicer conducted reasonable investigation of derogatory information given dispute letters, (Feb 3, 2026)

By Justin Marcus Smith, J.D.

The Eighth Circuit declined to adopt the heightened standard of accuracy used in some circuits to find the disputed credit report materially misleading, even if technically accurate.

A mortgage servicer conducted a reasonable investigation of credit reporting information it provided to credit reporting agencies about a couple’s mortgage payment, held the United States Court of Appeals for the Eighth Circuit, in affirming summary judgment for the mortgage servicer. In light of the insufficiently informative dispute letters the couple provided, the account level investigation the mortgage servicer carried out in this matter exceeded that found to be reasonable in an Eleventh Circuit case. Furnishers of credit reporting information are not required to do more than the Fair Credit Reporting Act (FCRA) requires. The Eighth Circuit declined to apply a heightened standard that the information the mortgage servicer reported was misleading, even if technically accurate (Johnson v. Freedom Mortgage Corp., No. 24-2787 (8th Cir. Feb. 2, 2026)).

Background. A couple sued Freedom Mortgage Corporation (Freedom) under the FCRA, 15 U.S.C. § 1681. The couple alleged their credit report was inaccurate because Freedom failed to reasonably investigate the absence of an account number on a monthly mortgage payment check and apply it to their account.

Credit reporting agencies notified Freedom about the dispute and forwarded dispute letters to the couple. Freedom investigated, verified the payment was more than 30 days late, and refused to change the credit reporting.

The couple argued Freedom’s FCRA investigation was unreasonably “cursory” (see Hinkle v. Midland Credit Mgmt., Inc., 827 F.3d 1295, 1305 (11th Cir. 2016)), but the district court concluded the credit report was accurate because the payment was in fact late. The first check the couple provided did not conform with a stated requirement that checks must indicate the loan number for the account.

The district court held there was no material dispute about the report’s accuracy and granted summary judgment to Freedom Mortgage. The couple appealed to the United States Court of Appeals for the Eighth Circuit, but the Eighth Circuit affirmed on de novo review.

Analysis. The Eighth Circuit did not agree with the couple that Freedom’s investigation was unreasonably cursory. The court reasoned that a furnisher’s obligation to conduct a reasonable investigation under § 1681s-2(b) arises when it receives a notice of dispute from a reporting agency. It need only investigate based on the credit reporting agency’s notice of dispute.

The couple’s dispute letters here were conclusory and short. The letters stated only that they made their payments on time. The letters did not explain the failure to write the account number on the first payment check or a conversation with a Freedom account representative.

The Eighth Circuit found Freedom mortgage investigated the account history, notes, and payment history. That was more than what the Hinkle furnisher did. The Eighth Circuit concluded here that no jury could have found the investigation was unreasonable because furnishers are not required to do more than what the FCRA requires: (1) they must not furnish information they know or have reason to believe is inaccurate; and (2) they must investigate a consumer dispute, report the result, and correct inaccurate, incomplete, or unverifiable information uncovered.

The couple asked the Eighth Circuit to adopt the heightened standard of accuracy used in some circuits to find the Freedom report materially misleading despite being technically accurate. The Freedom investigation did not find evidence of inaccuracy or incompleteness under either test, so the court did not need to decide whether to adopt the heightened test.

The Eighth Circuit likewise ruled it did not need to address the argument that the district court erred by looking to 15 U.S.C. § 1681s-2(a) for the standard of accuracy because Freedom performed a reasonable investigation that did not find the alleged deficiency.

Last, Eighth Circuit declined to consider whether the payment instructions in the Freedom welcome letter were ambiguous because the couple did not raise that argument in the district court.

The case is No. 24-2787.

Judge: Kobes, J.

Attorneys: David Ali Chami (Consumer Justice Law Firm, PLC) for Lea E. Johnson and Samantha J. Johnson. John J. Berry (Dinsmore & Shohl LLP) for Freedom Mortgage Corp.

Companies: Freedom Mortgage Corp.

LitigationEnforcement: ArkansasNews ConsumerCredit FairCreditReporting IowaNews MinnesotaNews MissouriNews Mortgages NebraskaNews NorthDakotaNews SouthDakotaNews