The three trade groups challenging an amendment to Nevada law that allows an applicant for credit with no credit history to request that the creditor deem the applicant’s credit history to be identical to that of the applicant’s spouse during the marriage have responded to the motion to dismiss their lawsuit filed by the Commissioner of the Financial Institutions Division (FID) of the Nevada Department of Business and Industry and the Nevada Attorney General. The amendment is contained in Senate Bill 311 which was signed into law by the Nevada Governor on July 1, 2019 and became effective on October 1. A preliminary injunction motion filed by the trade groups is currently pending.
The lawsuit includes an allegation that the amendment is preempted by the Fair Credit Reporting Act and the Equal Credit Opportunity Act. In their motion to dismiss, the Commissioner and AG argue that the plaintiffs’ claims do not satisfy Article III ripeness standards because there is no history of enforcement and the FID should be allowed to consider regulations to address the plaintiffs’ preemption concerns.
In their response to the motion to dismiss, the trade groups argue that their lawsuit is constitutionally ripe because (1) it coerces their members “into a dilemma of having to choose between violating state law or violating federal law” which is “precisely the sort of dilemma the Declaratory Judgment Act was meant to ameliorate,” and (2) there is a credible threat that the amendment will be enforced. The reasons given by the trade groups for why there is a credible threat include: the FID declined the trade groups’ request for it to issue a notice of non-enforcement before the amendment took effect; when a statute is new, the absence of historical enforcement is not relevant; and the universe of potential complainants is not limited to the defendants since the law can be enforced by private plaintiffs.
The trade groups also assert that it is irrelevant and wrong for the Commissioner and AG to suggest that the FID could resolve the conflict between the amendment and federal law. According to the trade groups, the contention is irrelevant because the FID has provided no evidence of what it intends to do to resolve the conflict nor have the Commissioner or AG explained “why, if all problems might be solved through agency action, the [FID] has done nothing about SB 311 in the six months that have passed since the Governor approved it.” They assert the contention is wrong “because resolving the conflict between SB 311 and federal law will not address the many other practical and privacy-related defects set forth in the plaintiffs’ complaint.”