ARTICLE · 02 FEBRUARY 2024

CJEU ADM Decision Casts Wide Net Over Credit Scoring Agencies

Goodwin Procter LLP

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On December 7, 2023, the Court of Justice of the European Union ("CJEU") delivered a landmark decision against SCHUFA Holding AG ("SCHUFA") that will likely impact how the EU...

United StatesPrivacy

Curtis McCluskey

Jonathan Louis Newmark

On December 7, 2023, the Court of Justice of the European Union ("CJEU") delivered a landmark decision against SCHUFA Holding AG ("SCHUFA") that will likely impact how the EU General Data Protection Regulation ("GDPR") applies to credit scoring agencies. In the decision, OQ v. Land Hessen, the CJEU decided that SCHUFA's credit scoring qualified as automated decision making ("ADM") which is subject to Article 22 GDPR.

Background

The case involved a prospective borrower ("OQ") who exercised her individual rights under the GDPR after a lender denied her loan application based on credit information supplied by a German credit reference agency, SCHUFA. SCHUFA used OQ's personal data to produce a score indicating the individual's creditworthiness, which was then shared with the German lender.

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