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Posts published in “TILA”

3rd Cir. Reverses Dismissal of FCBA Billing Error, TILA Unauthorized Use Claims

The U.S. Court of Appeals for the Third Circuit recently reversed the dismissal of a consumer’s complaint for unauthorized use of his credit card, holding that he stated claims for relief under the federal Fair Credit Billing Act’s correction of billing errors provisions, and the federal Truth in Lending Act’s unauthorized-use provisions. In so ruling, the Court held that: When “a creditor removes a disputed charge from a billing statement and later reinstates that charge, the 60-day period in which a consumer must file a written dispute begins when the consumer receives the first statement reinstating the charge.” “A cardholder…

Fla. App. Court (4th DCA) Holds RIC Not Subject to State Usury Law

The District Court of Appeal of the State of Florida, Fourth District recently affirmed entry of summary judgment in favor of a motor vehicle retail seller and assignee against a consumer who alleged that the 27.81 percent interest charge under the retail installment contract (“RIC”) exceeded the interest rate limit imposed by Florida’s usury statute. In so ruling, the Court concluded that the financing contract at issue was not subject to the interest rate limit imposed by Florida’s general usury statute, but instead by the specific controlling statute, the Florida Motor Vehicle Retail Sales Finance Act. A copy of the…

8th Cir. Rejects ‘Envelope Theory’ in TILA Rescission Action

The U.S. Court of Appeals for the Eighth Circuit held that the plaintiff borrowers did not offer sufficient evidence to defeat the rebuttable presumption created by the signed acknowledgement that they received the required number of copies of the federal Truth in Lending Act (TILA) notice of right to cancel disclosures. In so ruling, the Court noted that the plaintiff borrowers did not claim personal knowledge of the number of copies of the disclosure provided at closing, but instead relied on the so-called “envelope theory,” which the Court held was inadmissible hearsay. Accordingly, the ruling of the trial court granting…

9th Cir. Holds No NBA Preemption for State Law on Escrow Accounts, TILA Escrow Account Rules Not Retroactive

The U.S. Court of Appeals for the Ninth Circuit recently held that the National Bank Act (NBA) did not preempt California’s state escrow interest law, which requires financial institutions to pay at least 2 percent simple interest per annum on escrow account funds. In so ruling, the Court also held that the federal Truth in Lending Act provisions for escrow accounts, at 15 U.S.C. § 1639d, did not apply to loans originated before the 2013 effective date of the provisions. A copy of the opinion in Lusnak v. Bank of America is available at:  Link to Opinion. In July 2008, the…

7th Cir. Holds TILA Claim for Failing to Rescind After Notice Was Time Barred by 1-Year SOL

The U.S. Court of Appeals for the Seventh Circuit recently held that, following the confirmation of a foreclosure sale in Illinois, the only remedy available to a borrower under 15 U.S.C. § 1635 was damages, and therefore the one-year limitation period under 15 U.S.C. § 1640(e) applied and his claims were barred despite the fact that he provided rescission notices within three years of the loan closing, and despite the fact that the parties engaged in back-and-forth communications after the demands were first sent. Accordingly, the Seventh Circuit affirmed the dismissal of the borrower’s claims by the trial court. A…

10th Cir. Rejects Action to Void Foreclosure Sale Based on Prior TILA Cancellation Demand

The U.S. Court of Appeals for the Tenth Circuit recently held that a borrowers’ federal court claim attempting to void a foreclosure sale based on a prior demand to cancel the loan under the federal Truth in Lending Act (TILA) was barred by claim preclusion for failure to raise the issue in a prior state court action. A copy of the opinion in Pohl v. US Bank is available at:  Link to Opinion. The plaintiff borrowers refinanced the loan on their home in May 2007.  In 2009, the borrowers defaulted on their loan.  In March 2010, believing that their lender had…

8th Cir. Holds Borrower’s Affidavit Alone Is Insufficient to Rebut TILA’s Presumption of Delivery

The U.S. Court of Appeals for the Eighth Circuit recently held that two borrowers’ conclusory affidavits by themselves were insufficient to rebut the presumption of delivery under the federal Truth in Lending Act, 15 U.S.C. § 1635(c), where the borrowers acknowledged in writing at the closing that they received the disclosures required under TILA. A copy of the opinion in Alan Keiran v. Home Capital, Inc. is available at:  Link to Opinion. In 2010, before the Supreme Court of the United States’ ruling in Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), the borrowers filed this action…

SCOTUS Rules State Credit Card Anti-Surcharge Law Regulates Speech, Not Conduct

The Supreme Court of the United States recently held that a state law penalizing merchants for charging a surcharge for credit card payments did not restrict the amount that a store could collect when a buyer paid by credit card (i.e., a regulation on conduct). Instead, the Court held that the state statute regulated how sellers may communicate their prices, and was therefore a regulation on speech subject to First Amendment scrutiny. As you may recall, in Dana’s R.R. Supply v. AG, 807 F.3d 1235 (11th Cir. 2015), the U.S. Court of Appeals for the Eleventh Circuit held that a…

Calif. App. Court (2nd Dist) Holds Res Judicata Did Not Bar TILA Action Based on Prior Contract Action

The Court of Appeal of California, Second District, recently held the dismissal of a borrower’s breach of contract claim in a prior lawsuit did not bar a claim in a subsequent lawsuit for violation of the federal Truth in Lending Act, 15 U.S.C. § 1601, et seq., even if the breach of contract and TILA claims were based on the same set of underlying facts, because the right to full disclosures under TILA was a distinct primary right from the common law rights in contract. However, although the Appellate Court determined that the dismissal based on the doctrines of res…

9th Cir. Holds Servicer May Have Violated UDAP by Soliciting Trial Mod Payments After Determining Borrower Ineligible

The U.S. Court of Appeals for the Ninth Circuit recently reversed an award of summary judgment in favor of a mortgage loan servicer, holding that the evidence could support a verdict that the servicer engaged in an unfair business practice by accepting trial modification plan payments when it had previously determined the borrower was not eligible for a loan modification. A copy of the opinion Oskoui v. J.P. Morgan Chase Bank, N.A. is available at:  Link to Opinion. A borrower defaulted on her mortgage loan, and later applied for a loan modification.  The mortgage loan servicer sent her a letter…

Statutory Interest Cannot Accrue on Charged-off Credit Cards, Says Kentucky Supreme Court

The Kentucky Supreme Court recently ruled that a debt buying company may not charge or collect statutory interest under section 360.010 of the Kentucky Revised Statutes on an account it acquired after it was charged off by the original creditor. Carol Harrell’s credit card account was charged off by the original creditor on Jan. 18, 2011 and was sold to a debt buying company in November of the same year. In a collection lawsuit brought in April 2012, the debt buying company sought judgment for the charged-off balance plus statutory interest from the date of charge off. In response, Harrell…

2nd Cir. Attempts to Clarify Spokeo as to Alleged Violations of Statutorily Required Procedures

The U.S. Court of Appeals for the Second Circuit recently rejected an interpretation of Spokeo that would preclude all violations of statutorily mandated procedures from qualifying as concrete injuries supporting standing. In so ruling, the Court held that some violations of statutorily mandated procedures might entail the concrete injury necessary for standing where Congress conferred the procedural right to protect a plaintiff’s concrete interests, and where the procedural violation presents a material “risk of real harm” to that underlying concrete interest. A copy of the opinion in Strubel v. Comenity Bank is available at:  Link to Opinion. As you may…