Tag Archives: Truth in Lending Act

Ninth Circuit Holds That a Prohibition on Credit Card Surcharges Abridges Merchants’ Freedom of Speech in Violation of First Amendment

The Ninth Circuit’s recent decision in Italian Colors Rest. v. Becerra (“Italian Colors”),[1] upheld an as-applied constitutional challenge to a California law prohibiting retailers from imposing a surcharge on customers paying with a credit card.  In a unanimous decision, a three-judge panel for the Ninth Circuit agreed with the district court that an over 30-year-old … Continue reading this entry

Reply Brief filed in Spokeo v. Robins – Oral Argument next on Nov. 2

In its reply brief in Spokeo v. Robins, petitioner Spokeo comes out of the gate with the consequential argument that for Robins to prevail, the Supreme Court must accept his position that every violation of a statutory right qualifies as an injury-in-fact. Indeed, the case is much larger than Fair Credit Reporting Act (FCRA) inaccuracies … Continue reading this entry

CFPB Extends TRID Effective Date to October 1

The Consumer Financial Protection Bureau (“CFPB”) announced that it would provide mortgage lenders with additional time to prepare for the highly anticipated TILA-RESPA Integrated Disclosures (“TRID”). Since the issuance of TRID’s final regulations in November 2013, mortgage lenders have been frantically preparing for its effective date of August 1, 2015. Generally speaking, TRID will consolidate … Continue reading this entry

A Bit of Grace

The Consumer Financial Protection Bureau (CFPB) has finally agreed to bend under the strain of numerous requests from financial industry participants and 255 bi-partisan House members and 41 senators, who requested that the CFPB delay the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosures (TRID) requirements.  Although … Continue reading this entry

The Supreme Court Just Held that TILA Rescission is Accomplished with Notice Alone

Until today, courts were split over what steps borrowers must take to rescind a home loan. Some courts had ruled that a borrower simply had to send a rescission notice to his creditor within three years after taking out a loan. Others said the notice alone does not suffice; a lawsuit must be filed within three … Continue reading this entry

Truth in Lending Act and Consumer Leasing Act Dollar Thresholds Raised: Fewer Transactions Exempt

More consumer credit and leasing transactions will be subject to the Truth in Lending Act (TILA) and Consumer Leasing Act (CLA) in 2015. Effective January 1, 2015, the dollar threshold for exemption of most consumer credit transactions and consumer leases from TILA, the CLA, and their implementing regulations (Regulations Z and M) was increased from $53,500 (the … Continue reading this entry

CFPB Unveils New Integrated Disclosures Under RESPA and TILA

Today, in a broadcast streamed live on the internet, the CFPB unveiled the long awaited final rule that contains the Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (“RESPA”), Regulation X, and the Truth-In-Lending Act (“TILA”), Regulation Z.[1] The final rule applies to most closed-end consumer mortgage loans (including timeshare estate products), but … Continue reading this entry

CFPB Continues to Finalize Elements of “Points and Fees” Test as Implementation Date Draws Closer

The CFPB’s final ability-to-repay rule (Rule), issued January 10, 2013, implements Dodd-Frank mortgage reforms requiring creditors to make good faith determination that a consumer has reasonable ability to repay his or her home loan before the loan is extended.  The CFPB provided certain protections from liability under this requirement for loans that meet the criteria … Continue reading this entry

CFPB Proposes Amendments to New Final Ability-to-Repay Rule, Solicits Comment on Calculating Loan Originator Compensation

On January 10, 2013, the CFPB issued its final ability-to-repay rule (Rule), which implements Dodd-Frank mortgage reforms requiring creditors to make a reasonable and good faith determination that a consumer will have a reasonable ability to repay the loan according to its terms. Failure to comply with these requirements may give rise to various damages … Continue reading this entry

CFPB Issues Final Rules Amending Regulation X and Regulation Z

Today, the CFPB issued final rules amending Regulation X (Real Estate Settlement Procedures Act (“RESPA”)) and Regulation Z (Truth in Lending Act (“TILA”)). The amendments focus on mortgage servicing requirements and servicer obligations, and largely track the CFPB’s proposed rules issued August 10, 2012. The CFPB’s announcement of the final rules includes the preamble, regulatory text and … Continue reading this entry

Final Rule Issued on Ability-to-Repay/Qualified Mortgages

The Consumer Financial Protection Bureau (CFPB) issued its final ability to repay rule (Rule) on January 10, 2013. The Rule implements ability-to-repay provisions of the Dodd-Frank Act, which imposed strict underwriting standards upon lenders to ensure that prospective buyers have the ability to repay their mortgages. A failure to comply with these requirements will constitute a … Continue reading this entry

TILA Does Not Require a Loan Servicer to Identify the Loan’s Owner

The Ninth Circuit recently sided with a loan servicer who was sued by a borrower for failing to provide him with the loan owner’s information. In Gale v. First Franklin Loan Services et al., 686 F.3d 1055 (9th Cir. 2012), amended, 2012 U.S. App. LEXIS 18545 (9th Cir. Aug. 31, 2012), the Ninth Circuit held that … Continue reading this entry

Sixth Circuit Rules "Envelope Theory" Fails to Rebut the Presumption of Receipt of TILA Notice of Cancellation

The United States Court of Appeals for the Sixth Circuit has ruled Janet and Raymond Lee could not rescind their mortgage loan from Countywide Home Loans because they could not prove they were not each given two notices of their right to cancel it as the Truth in Lending Act requires. 15 U.S.C. § 1635(a). Their … Continue reading this entry

Party Crashers: CFPB Files Amicus Briefs in Private Lawsuits, Seeks Referrals

Since late 2011, the Consumer Financial Protection Bureau has been quietly filing amicus curiae (or friend-of-the-court) briefs in some federal appellate cases brought by private litigants. The Bureau is now publicizing its amicus program–and it is actively seeking additional case referrals.  According to the Bureau, “strong candidates” include cases which have been, or imminently will … Continue reading this entry

Hot Off of the Regulatory Printer -- CFPB Releases Its Proposed “Know Before You Owe” Disclosures

For weeks the Consumer Financial Protection Bureau has been advertising the pending release of its proposed mortgage loan disclosures that “are easier for both consumers and lenders to understand and use.”  Alas, await no more.  The CFPB released its proposed mortgage loan disclosures today.   The purpose of the new, supposedly friendlier disclosures, is for the … Continue reading this entry

Tenth Circuit Upholds Strict Three Year Time Bar for Rescission Claims Under TILA

In a recent decision, the Tenth Circuit upheld TILA §1635(f) as a statute of repose that acts to extinguish the right of a consumer to claim the affirmative defense of rescission three years after the consummation of a loan transaction.  In Rosenfield v. HSBC Bank,[1] Ms. Rosenfield appealed a decision handed down by the United … Continue reading this entry

CFPB Says Rescission Complete on Notice

In a brief filed Tuesday the CFPB argued to the Tenth Circuit Court of Appeals in Denver that a consumer need not file a lawsuit in order to rescind a home equity line of credit, second mortgage or refinance when proper disclosures have not been given. Section 1635 of the Truth in Lending Act requires … Continue reading this entry

The Fourth Circuit Declines to Put TILA Form Over Substance

In the recent decision, Watkins v. SunTrust Mortg., Inc., No. 10-1915, 2011 WL 6188751 (4th Cir. Dec. 14, 2011), the Fourth Circuit ruled on the specific information that a lender must provide to a borrower in order to comply with TILA’s rescission notice requirement. The Truth in Lending Act, 15 U.S.C. § 1601 et seq. … Continue reading this entry

Seventh Circuit Reverses Summary Judgment in Dispute Over Truth-in-Lending Act Rescission Notices

Can a lender ever obtain summary judgment in a dispute over delivery of Truth-in-Lending Act rescission right disclosures? A recent decision by the Seventh Circuit raises significant doubts. The Truth-in-Lending Act (TILA) requires that lenders notify consumer borrowers in writing of their right to rescind a mortgage loan transaction (secured by their principal residence) within three business days following consummation of … Continue reading this entry

Federal Court Enjoins Regulation Z Amendment

A federal judge in Sioux Falls, South Dakota, has issued a preliminary injunction to postpone and enjoin the effective date of a recent amendment to Federal Reserve Board Regulation Z. The case was brought by credit card issuer First Premier Bank and its subsidiary Premier Bankcard, LLC (collectively First Premier) against the Bureau of Consumer Financial Protection (which now … Continue reading this entry

Ninth Circuit Revisits its Previous Interpretation of Delaware Lending Law

The Ninth Circuit recently reversed its previous interpretation of Delaware law restricting a bank from increasing the interest rate charged upon a default of the borrower. In McCoy v. Chase Manhattan Bank, USA, N.A., 06-56278, 2011 WL 3634158 (9th Cir. Aug. 19, 2011), the plaintiff filed a class action lawsuit in the Central District of … Continue reading this entry

Belated Assertion of Diversity Can Save Remaining State Claims From Remand

The Fifth Circuit recently reviewed the question of whether, upon dismissal of all federal claims, a finding of diversity jurisdiction would preserve a federal district court’s jurisdiction over the remaining state law claims, even though the defendant had failed to timely assert diversity jurisdiction as an initial ground for removal. Answering the question in the … Continue reading this entry

Class of Subprime Borrowers Made "Bad Bargain," Failed to Allege Violation of TILA's Disclosure Requirements, Second Circuit Holds

The Second Circuit has affirmed the Federal Rule 12(b)(6) dismissal of a Truth in Lending Act (TILA) claim in Poulin v. Balise Auto Sales, Inc., holding that the plaintiffs failed to allege facts suggesting that their purchases of cars with subprime installment loans included undisclosed finance charges, even though the plaintiffs purportedly paid substantially more than book value and alleged that purchasers with good … Continue reading this entry

Higher Dollar Threshold Amounts for Exempt Consumer Credit and Leasing Transactions

Effective July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act increased the threshold amount for transactions exempt from the Truth in Lending Act and the Consumer Leasing Act from $25,000 to $50,000. Dodd-Frank also requires annual adjustment of the threshold amount based on annual percentage increases in the consumer price index. In recently published … Continue reading this entry