Argued: October 30, 2018
from the United States District Court for the Eastern
District of Virginia, at Richmond. John A. Gibney, Jr.,
District Judge. (3:16-cv-00731-JAG)
Charles Kalman Seyfarth, O'HAGAN MEYER PLLC, Richmond,
Virginia, for Appellants.
Dean Domonoske, CONSUMER LITIGATION ASSOCIATES, P.C., Newport
News, Virginia, for Appellee.
Elizabeth Scott Turner, O'HAGAN MEYER PLLC, Richmond,
Virginia, for Appellants.
W. Pittman, THE LAW OFFICE OF DALE W. PITTMAN, P.C.,
Petersburg, Virginia, for Appellee.
DUNCAN, KEENAN, and DIAZ, Circuit Judges.
DUNCAN, CIRCUIT JUDGE
Propel Property Tax Funding, LLC and Propel Financial
Services, LLC (collectively "Propel") entered into
a Tax Payment Agreement (a "TPA") with Appellee
Garry Curtis pursuant to Virginia Code section 58.1-3018.
Curtis sued Propel on behalf of himself and other similarly
situated individuals, alleging violations of the Truth in
Lending Act (the "TILA"), 15 U.S.C. § 1601
et. seq., the Electronic Funds Transfer Act (the
"EFTA"), id. § 1693 et.
seq., and the Virginia Consumer Protection Act (the
"VCPA"), Va. Code Ann. § 59.1-196 et.
seq. Propel moved to dismiss Curtis's claims under
TILA and EFTA, contending that the TPA is not a consumer
credit transaction governed by those statutes. The district
court denied Propel's motion and sua sponte certified two
rulings for interlocutory review pursuant to 28 U.S.C. §
1292(b): (1) its determination that Curtis has standing to
proceed on his EFTA claims against Propel and (2) its
decision that these TPAs are consumer credit transactions for
purposes of TILA and EFTA. For the reasons that follow, we
affirm the district court on both issues.
allows taxpayers to enter into agreements with third parties
to finance payment of local taxes. Va. Code Ann. §
58.1-3018. Under these agreements, a third party
agrees to pay taxes owed to a locality on behalf of a
taxpayer, and the taxpayer agrees to repay the third party in
installments, with fees and interest. Id. The terms
of the agreement, including repayment periods, interest
rates, and other fees, are prescribed by statute.
Id. For the period during which the taxpayer repays
the third party, the locality tolls the enforcement period
for the taxes owed. Id. § 58.1-3018(E). Nothing
in the statute indicates that these agreements have any
effect on tax liens that may be imposed by Virginia
If the taxpayer defaults on the agreement despite the third
party's good-faith efforts to collect from him, the third
party can ask the locality to reimburse the third party for
any taxes paid and to reinstate the full tax obligation
against the taxpayer (minus any principal payments made by
the taxpayer to the third party). Id. §
58.1-3018(C). Upon reimbursement, "[a]ny right of the
third party to payment" under the agreement terminates.
Id. § 58.1-3018(C)(4).
owed $13, 734.43 in residential property taxes to the city of
Petersburg, Virginia and entered into a TPA with Propel to
finance payment of them. The parties agree that the TPA at
issue operates in conformity with Virginia's statutory
framework, id. § 58.1-3018; see J.A.
32 (stating that under the terms of the TPA, "[o]ur
financing of taxes on your behalf pursuant to this Agreement
is made pursuant to Va. Code Section 58.1-3018"). For
instance, the TPA requires Curtis to pay an origination fee
equal to ten percent of his tax obligation, which is the
maximum origination fee allowed under the statute.
See Va. Code Ann. § 58.1-3018(B)(2); J.A. 30.
The TPA also sets Curtis's interest rate at 10.95
percent, below the statutory maximum of sixteen percent, and
specifies that no interest shall accrue during the first six
months of the agreement, as the statute requires.
See Va. Code Ann. § 58.1-3018(B)(2); J.A.
30. The TPA requires Curtis to repay Propel in
monthly installments for ninety-six months, which is the
maximum period allowed by the statute. See Va. Code
Ann. § 58.1-3018(B)(2); J.A. 31.
nevertheless challenges the TPA and its associated documents
as violating TILA, EFTA, and VCPA on several grounds. For
instance, he contends that many of the terms of the TPA
included incorrect amounts, that Propel did not include an
itemized list of closing costs in the documents, and that the
TPA was missing certain allegedly required financial
disclosures. He also alleges that, as a condition of the TPA,
he was required to agree to repay Propel by preauthorized
electronic fund transfers ("EFTs") and that the
required authorization form does not contain a space that
would allow him to indicate that he declined to do so.
brought a proposed class action against Propel in federal
district court, alleging violations of TILA, EFTA, and
VCPA. Propel moved to dismiss for failure to
state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6), contending that the TPA is not subject to TILA or
EFTA because it is not a consumer credit transaction and that
the TPA is exempt from the VCPA. The district court granted
Propel's motion to dismiss as to the VCPA claim but
denied its motion as to the TILA and EFTA claims.
district court determined that Curtis had standing under EFTA
because the harm that he alleged--making the TPA contingent
on Curtis agreeing to preauthorized EFTs--was "exactly
the type of harm that Congress sought to prevent when it
enacted the EFTA." Curtis v. Propel Prop. Tax
Funding, LLC, 265 F.Supp.3d 647, 652 (E.D. Va. 2017).
The district court also determined that the TPA is subject to
TILA and EFTA because, as "third-party financing of a
tax obligation" for "personal, family, or household
purposes," the TPA is both a credit transaction and a
consumer transaction and thus qualifies as a consumer credit
transaction governed by those statutes. Id. at
652-53. However, the court certified for interlocutory review
(1) its decision that Curtis has standing to proceed on his
EFTA claims and (2) its determination that TPAs sanctioned by
Virginia Code section 58.1-3018 are subject to TILA and EFTA
as consumer credit transactions. This appeal followed.
makes two arguments on appeal. First, Propel contends that
Curtis does not have standing to bring a claim under EFTA
because he did not adequately allege that Propel required him
to agree to EFTs or that he made or attempted to cancel any
EFT payments. Second, Propel contends that Curtis's
complaint does not state a claim for relief under either TILA
or EFTA because the TPA is not a consumer credit transaction
within the terms of those statutes. Before considering these
issues, we first set forth the statutory framework to provide
the necessary context for our analysis.
and EFTA are consumer protection statutes that regulate the
terms of certain transactions. 15 U.S.C. §§ 1601
et. seq., 1693 et. seq. The purpose of TILA
is "to assure a meaningful disclosure of credit
terms" in order to improve consumer decisionmaking and
"to protect the consumer against inaccurate and
unfair" credit practices. Id. § 1601(a).
Similarly, EFTA was enacted to establish "individual
consumer rights" in the context of EFT transactions.
Id. § 1693(b). Thus, both TILA and EFTA are
"remedial consumer protection statute[s]" which we
"read liberally to achieve [their] goals" of
protecting consumers. Phelps v. Robert Woodall Chevrolet,
Inc., 306 F.Supp.2d 593, 596 (W.D. Va. 2003) (citation
and internal quotation marks omitted) (referring to TILA);
cf. Hoke v. Retail Credit Corp., 521 F.2d 1079, 1082
n.7 (4th Cir. 1975) (explaining that we interpret the Fair
Credit Reporting Act liberally in light of "its broad
remedial purposes"). At issue in this appeal are
TILA's requirement that creditors disclose certain
information in consumer credit transactions, 15 U.S.C. §
1638, EFTA's prohibition on "condition[ing] the
extension of credit to a consumer on such consumer's
repayment by means of preauthorized electronic fund
transfers," id. § 1693k, and EFTA's
requirement that no consumer agreement may operate as a
waiver of one of EFTA's substantive rights, id.
by the applicable statutes, we affirm the district court.
First, we hold that Curtis has standing to bring claims under
EFTA because the harm that he alleges is a substantive
statutory violation that subjects him to the very risks that
EFTA, a consumer protection statute, was designed to protect
against. Second, we hold that the TPA is subject to TILA and
EFTA because the TPA is a consumer credit transaction.
Because the statutes define these terms separately, we
consider them as such. We determine that the TPA is a credit
transaction because it provides for third-party financing of
a tax obligation and that it is a consumer transaction
because, as financing of a real property tax debt, it is a
voluntary transaction that Curtis entered into for personal
or household purposes.
contends that Curtis lacks standing to bring claims under
EFTA. "We review legal questions regarding standing de
novo," and "[w]hen standing is challenged on the
pleadings, we accept as true all material allegations of the
complaint and construe the complaint in favor of the
complaining party." David v. Alphin, 704 F.3d
327, 333 (4th Cir. 2013) (emphasis omitted). In a class
action case, we look to the standing of the named plaintiff.
Dreher v. Experian Info. Sols., Inc., 856 F.3d 337,
343 (4th Cir. 2017).
the constitutional minimum requirements for standing to sue,
a "plaintiff must have . . . suffered an injury in fact,
. . . that is fairly traceable to the challenged conduct of
the defendant, and . . . that is likely to be redressed by a
favorable judicial decision." Spokeo, Inc. v.
Robins, 136 S.Ct. 1540, 1547 (2016). On appeal, Propel
challenges the injury-in-fact requirement. A plaintiff meets
this requirement if he alleges an injury that is
"particularized," "concrete," and
"actual or imminent, not ...