May 18, 2015 Articles

Truth in Lending Act Loan Rescission Claims

Borrowers may rescind under the Truth in Lending Act without filing a lawsuit by providing notice to the lender

by Maria Kreiter, Nina Beck, Maggie Cook, and John Kirtley

On January 13, 2015, the United States Supreme Court held that a borrower can exercise rescission under the Truth in Lending Act (TILA) without filing a lawsuit. Rather, the borrower need only provide written notice of rescission to the lender. This decision, Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), will make it easier for residential borrowers to pursue rescission claims. The case may, therefore, increase the number of rescission claims that lenders face and eliminate a defense that lenders might have otherwise been able to pursue.

TILA Rescission Explained
TILA is a federal law intended to ensure a meaningful disclosure of credit terms so that the consumer will be able to compare the various credit terms available and avoid the uninformed use of credit. 15 U.S.C. ยงยง 1601 et seq.; see also Carmichael v. Payment Ctr., Inc., 336 F.3d 636, 639 (7th Cir. 2003).

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