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August 29, 2005.

SLM CORP., a/k/a SALLIE MAE, INC., a Virginia Corporation, Defendant.

The opinion of the court was delivered by: BARRY MOSKOWITZ, District Judge

On April 5, 2005, Defendant Sallie Mae, Inc. filed (1) a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c); and (2) a motion to strike portions of the Complaint pursuant to Fed.R.Civ.P. 12(f). For the reasons stated below, the Court GRANTS IN PART AND DENIES IN PART Defendant's motion for judgment on the pleadings and DENIES Defendant's motion to strike.


  The following allegations are made in the Complaint; the Court does not make any findings as to the truth of these allegations. Plaintiff is a physician who partially funded his education through federally-funded student loans. (Complaint, ¶ 17.) Defendant is a corporation engaged in a variety of services related to student loans. Defendant is the servicer of Plaintiff's student loans. (Id.) It is unclear whether Defendant is also the lender of Plaintiff's student loans.

  On a number of occasions, Plaintiff contacted Defendant by telephone and requested a forbearance on his student loans. (Complaint, ¶ 18.) Defendant always orally agreed to grant Plaintiff a forbearance. (Complaint, ¶ 19.)

  On or about June 2003, Plaintiff received an oral forbearance from Defendant in keeping with their past practices. (Complaint, ¶ 20.) Plaintiff understood from his conversations with Defendant that while the loans were in forbearance, Defendant would refrain from reporting negative credit information about Plaintiff to credit reporting agencies, and would not demand payment on the loans. (Complaint, ¶ 21.) However, when Plaintiff reviewed his credit report during this forbearance period, he discovered that Defendant had reported negative credit information about him to a number of credit reporting agencies. (Complaint, ¶ 22.)

  Plaintiff contacted Defendant and demanded to know why Defendant violated its previous agreement to grant Plaintiff a forbearance. (Complaint, ¶ 23.) Defendant denied ever agreeing to a forbearance and stated that Defendant would never grant a forbearance over the telephone. (Complaint, ¶ 24.) Defendant then informed Plaintiff that if he paid all of the past due payments Defendant claimed were owed, Defendant would instruct the credit reporting agencies to remove all of the negative credit information in dispute. (Complaint, ¶ 25.) Plaintiff agreed and paid the alleged past-due payments. (Complaint, ¶ 26.) However, Defendant failed to correct the negative credit information as promised. (Complaint, ¶ 27.) Defendant also failed to inform the credit reporting agencies, that the previously reported debt was in dispute. (Complaint, ¶ 29.) Furthermore, Plaintiff alleges that Defendant failed to adequately investigate Plaintiff's claims that the negative credit information was inaccurate and should be corrected. (Complaint, ¶ 32.)

  Subsequently, Plaintiff wrote to the credit reporting agencies and disputed the accuracy of the reported information. (Complaint, ¶ 30.) The credit reporting agencies conducted an investigation into the dispute. (Complaint, ¶ 31.) During the investigation, the credit reporting agencies contacted Defendant. (Id.) When contacted, Defendant claimed that Plaintiff had failed to pay debts that were owed. (Id.) Defendant failed to reinvestigate Plaintiff's claims regarding the inaccuracy of this information. (Complaint, ¶ 32.)

  Plaintiff alleges violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., and the California Fair Debt Collection Practices Act (CFDCPA) (also known as the "Rosenthal Fair Debt Collection Practices Act"), Cal. Civ. Code §§ 1788-1788.32.


  A motion for judgment on the pleadings attacks the legal sufficiency of the claims alleged in the Complaint. This Court must construe "all material allegations of the non-moving party as contained in the pleadings as true, and [construe] the pleadings in the light most favorable to the [non-moving] party." Doyle v. Rayle's Inc., 158 F.3d 1012, 1014 (9th Cir. 1998). "Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law." Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1990).


  A. Fair Credit Reporting Act

  Defendant argues that Plaintiff's FCRA claims under 15 U.S.C. § 1681s-2(a) fail because there is no private right of action for violations under said provision. The Court agrees. However, the Court also finds that Plaintiff has a valid FCRA claim under 15 U.S.C. § 1681s-2(b).

  Congress passed the FCRA in 1968 with the intent that "consumer credit reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information. . . ." 15 U.S.C. § 1681(b). Originally, the FCRA established duties for consumer ...

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