                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 04-2710

GEORGE STERGIOPOULOS & IVELISSE CASTRO,
                                            Plaintiffs-Appellants,


                                 v.



FIRST MIDWEST BANCORP, INC.,
                                              Defendant-Appellee.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
         No. 02 CV 5812—Blanche M. Manning, Judge.
                          ____________
    ARGUED APRIL 6, 2005—DECIDED OCTOBER 25, 2005
                      ____________
 Before BAUER, RIPPLE, and WOOD, Circuit Judges.
  WOOD, Circuit Judge. A few years ago, Ivelisse Castro
and George Stergiopoulos each decided to buy a new car.
Castro wanted a Toyota 4Runner, while Stergiopoulos
fancied a Chevrolet Camaro. When each of them sought
financing, their respective car dealers shopped the poten-
tial loans (or, as they were called, Retail Installment
Contracts (RICs)) to third-party lenders. One of the third-
party lenders to consider both loans was the defendant,
First Midwest Bancorp, Inc. In deciding whether to pur-
2                                                No. 04-2710

chase the plaintiffs’ RICs, First Midwest requested the
plaintiffs’ credit reports. First Midwest apparently did not
care for what it saw there, because it refused to take on
either Castro’s or Stergiopoulos’s RIC.
   This is a common scenario. Dealers routinely attempt to
assign tentative financing arrangements to lenders, and
those lenders often rely on a consumer’s credit report to
determine whether the deal is worth taking. The question
before us is whether, despite its routine nature, this
practice is legal. Stergiopoulos and Castro contend that it
is not. In their complaint, styled as a class action though no
class was ever certified, they assert that First Midwest has
been violating the Fair Credit Reporting Act (FCRA or Act),
15 U.S.C. § 1681 et seq., by requesting consumers’ credit
reports without the consumers’ knowledge or explicit
consent. First Midwest filed a motion for summary judg-
ment before the district court, arguing that the FCRA
authorized its actions. The district court so found and
granted judgment for First Midwest. We affirm.


                              I
  First Midwest has an arrangement with various car
dealers whereby the dealers offer First Midwest the chance
to purchase tentative loan agreements or RICs that the
dealers have arranged with potential car buyers. If First
Midwest decides not to purchase a particular RIC, the
dealer may provide the financing itself or it can attempt to
renegotiate the RIC with the buyer, hoping that First
Midwest will find the new terms more appealing. The
initial contract between buyer and dealer generally spells
out this process, leaving out the details that are the focus
of this appeal. Most importantly, the documents signed by
the buyers do not state specifically that the dealers could
shop their contracts to any number of potential third-party
lenders. In particular, the contracts that Stergiopoulos and
Castro signed made no mention of First Midwest.
No. 04-2710                                              3

  Stergiopoulos’s “Purchase Contract” with Rizza Buick,
the Camaro dealer, had this to say about the financing
arrangement:
   DEALER ARRANGED FINANCING. In the event of
   a time sale, RIZZA SHALL NOT BE OBLIGATED TO
   SELL UNTIL AND UNLESS a finance source approves
   this order and agrees to purchase a retail installment
   contract between Customer and Rizza based on this
   order. As part of obtaining financing, Customer agrees
   to provide Rizza with a true, correct and complete
   credit application and to cooperate fully in obtaining
   financing including the providing of any supporting
   documentation. This agreement may be canceled by
   Rizza if Rizza determines that it cannot obtain third
   party approval and may be canceled by either party if
   no financing is obtained for Customer on the agreed
   terms within 15 business days of the date of this
   agreement.
His signed financing application with GMAC said only “I
authorize an investigation of my credit and employment
history and the release of information about my credit
experience with GMAC.”
  Castro signed an installment contract at Union Nissan,
Inc., for her vehicle; that agreement stated that payments
should be made to Great Lakes Credit Union as assignee.
She also signed an application for credit with Nissan Motor
Acceptance Corp. (NMAC), which included the following
statement:
   You are authorized to check my credit and employment
   history and to answer questions about your credit
   experience with me. In connection with your your [sic]
   application for credit, a consumer report may be
   requested. On your request we will advise you if the
   report was actually ordered and if so, the name and
   address of the agency that furnished the report. Subse-
   quent consumer reports may be ordered.
4                                               No. 04-2710

Neither Castro’s nor Stergiopoulos’s credit application
mentioned that, in addition to NMAC and GMAC, respec-
tively, third-party lenders unknown to the plaintiffs might
also order copies of their reports. Nonetheless, it was clear
that the transaction contemplated sale of the paper to
another entity. It is also undisputed that the dealers
selected First Midwest in these two cases, and the custom-
ers had nothing to do with that choice.


                             II
   The FCRA expressly states that its purpose is to ensure
“that consumer 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).
In an attempt to achieve this balance between consumer
privacy and the needs of a modern, credit-driven economy,
the Act “limit[s] the furnishing of consumer reports” to
certain statutorily enumerated purposes. 15 U.S.C.
§ 1681e(a). If an entity requests a report for a purpose not
listed in the Act, an injured consumer can recover the
“actual damages” caused by negligent noncompliance, see
15 U.S.C. § 1681o(a)(1), or both actual and punitive dam-
ages caused by willful noncompliance, see 15 U.S.C.
§ 1681n.
  The plaintiffs contend that nothing in the Act authorized
First Midwest to request their reports and that First
Midwest’s requests weakened their credit ratings. First
Midwest disputes that its actions harmed the plaintiffs and
argues that, in any event, the Act allowed the requests.
First Midwest relied on § 1681b(a)(3)(A) and (E):
    (a) Subject to subsection (c) of this section, any
    consumer reporting agency may furnish a consumer
No. 04-2710                                                    5

    report under the following circumstances and no
    other:
    ...
    (3) To a person which it has reason to believe—
      (A) intends to use the information in connection
      with a credit transaction involving the consumer on
      whom the information is to be furnished and
      involving the extension of credit to, or review of
      collection of an account of, the consumer; or
      ...
      (E) intends to use the information, as a potential
      investor or servicer, or current issuer, in connection
      with a valuation of, or an assessment of the credit
      or prepayment risks associated with, an existing
      credit obligation.
  We start with subparagraph (3)(A). The plaintiffs contend
that First Midwest was not authorized to receive the
plaintiffs’ credit reports under this provision because no
“credit transaction involving the consumer” existed between
the plaintiffs and First Midwest. In their view, there were
two wholly separate transactions: one between each
plaintiff and his or her dealer, and another between the
dealer and First Midwest. Castro and Stergiopoulos argue
that the second transaction was divorced from the first to
such a degree that they were no longer “involved” in it.
  In support of this position, the plaintiffs rely on Andrews
v. TRW, Inc., 225 F.3d 1063, 1067 (9th Cir. 2000), rev’d on
other grounds, 534 U.S. 19 (2001). Andrews concerned
identity theft, where an individual had stolen the
plaintiff’s Social Security number in order to obtain credit.
The plaintiff sued a credit reporting agency, contending
that the agency had acted negligently by allowing the
imposter to obtain access to her credit report. The credit
agency argued that subparagraph (3)(A) authorized its
6                                               No. 04-2710

actions because the imposter’s credit report request “in-
volved” the plaintiff. The Ninth Circuit rejected this
position, finding the agency’s interpretation of
subparagraph (3)(A) too broad. 225 F.3d at 1067 (“We are
reluctant to conclude that Congress meant to harness any
consumer to any transaction where any crook chose to use
his or her number.”).
  The situation here is quite different. The plaintiff in
Andrews was a bystander, unwittingly “involved” because
of an imposter’s deception. Here, in contrast, Stergiopoulos
and Castro initiated the credit transactions at the car
dealerships by requesting financing. While they did not
know that First Midwest in particular was going to request
their credit reports, they were aware that the transactions
contemplated sale of the RIC to a third party, and the
statute does not require that consumers expressly approve
each request for a report. The use of the word “involved”
implies that the entity obtaining the credit report may not
have a predicate credit transaction with the consumer
directly; instead, on its face, the provision merely requires
that the entity must be engaged in a credit transaction in
which the consumer is participating. Here, the car dealer
served as a broker. If First Midwest had accepted the
plaintiffs’ RICs, the dealer would no longer have been part
of the relationship. First Midwest would have sent bills
directly to the plaintiffs; the plaintiffs would have paid
First Midwest directly. By requesting the plaintiffs’ credit
reports for the sole purpose of determining whether to
furnish the plaintiffs with credit, First Midwest satisfied
the FCRA’s requirement that it “intend[ed] to use the
information in connection with a credit transaction involv-
ing” Castro and Stergiopoulos.
  The plaintiffs warn that this reading extends the Act too
far and that it makes it too easy for anyone to request a
credit report without the consumer’s knowledge. While it
may be a better practice for car dealers explicitly to inform
No. 04-2710                                                  7

their customers that unknown third-party lenders might
request the customers’ credit reports, we are not convinced
that a failure to do so violates the FCRA as it is now
written. An entity may rely on subparagraph (3)(A) only if
the consumer initiates the transaction. A third party cannot
troll for reports, nor can it request a report on a whim.
Rather, there must be a direct link between a consumer’s
search for credit and the bank’s credit report request. If the
connection between a consumer’s search and a bank’s
request is clear, it is unlikely that the request will infringe
the consumer’s privacy interests, for it will “involve” the
plaintiff directly. See Cole v. U.S. Capital, 389 F.3d 719,
725 (7th Cir. 2004) (“Many of the enumerated permissible
purposes set forth in § 1681b are transactions initiated by
the consumer; these purposes therefore do not create
significant privacy concerns.”). Here, First Midwest pulled
the plaintiffs’ credit reports only because the plaintiffs
sought financing for their new cars. The line of causation
was direct and thus the request fell within the purview of
subparagraph (3)(A).
  Fortunately for the defendants, the FCRA requires only
one permissible purpose; we note for the sake of complete-
ness that First Midwest would have been out of luck if it
had been required to rely on subparagraph (3)(E). That
provision applies only if an entity requests a consumer’s
credit report “in connection with . . . an existing credit
obligation.” Here, there was an existing contractual obliga-
tion, not an existing credit obligation, between the plaintiffs
and their car dealers. Recall that Rizza Buick had the right
to cancel its agreement with Stergiopoulos if the search for
financing on the agreed terms was unsuccessful. A credit
obligation would arise only if and when the dealer or a
third party agreed to finance the purchase of the car. Since
neither event had occurred by the time First Midwest
requested the plaintiffs’ credit reports, no credit obligation
yet existed. Without such an obligation, subparagraph
(3)(E) does not come into play.
8                                             No. 04-2710

                             III
  For these reasons, we AFFIRM the judgment of the district
court.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit




                  USCA-02-C-0072—10-25-05
