BuckleySandler LLP: CFPB Files Amicus in TILA Rescission Case

Excerpted from Infobytes, a weekly electronic newsletter on developments in financial services law from BuckleySandler LLP. For the full issue of Infobytes, click here: http://www.buckleysandler.com/infobyte-detail/infobytes-March-30-2012

On March 27, the CFPB announced that it recently filed an amicus brief in the U.S. Court of Appeals for the Tenth Circuit in a case involving the Truth in Lending Act (TILA) right to rescind a transaction, Rosenfield v. HSBC Bank, No. 10-1442 (10th Cir.). The CFPB argued that borrowers who do not receive the material disclosures required by TILA can rescind the transaction as long as they notify the lender of the cancellation within three years of consummation, even if they do not file suit within the three-year period. The CFPB urged the Tenth Circuit to reject the view of the majority of courts that the borrower must both notify the lender and file suit within three years.  Citing both the statute and the CFPB's implementing Regulation Z, the CFPB argued that the holding in Beach v. Ocwen Federal Bank, 523 U.S. 410 (1998) [enhanced version available to lexis.com subscribers], that the right to rescind expires completely after three years, simply means that "consumers [must] exercise their rescission right by providing notice to their lender within three years of obtaining the loan," and that consumers could file suit after three years if the lender failed to honor the rescission notice. As an indication of the Bureau's intense interest in this issue, it noted that it plans to file amicus briefs on the same question in at least three other circuits in which briefing is still pending.

....

Lexis.com subscribers can explore/search Real Estate Law resources on Lexis.com or access any of these Mathew Bender Real Estate Law publications:

Non-subscribers can purchase Property Law treatises/resources and Mathew Bender publications from the LexisNexis Bookstore

Non-subscribers can purchase Real Estate Law treatises/resources and Mathew Bender publications from the LexisNexis Bookstore

For more information about LexisNexis products and solutions connect with us through our corporate site.