Posted on08 October 2015.
THE TRUTH SHALL SET YOU FREE:
EXPLAINING JUDICIAL HOSTILITY TO THE
TRUTH IN LENDING ACT’S
RIGHT TO RESCIND A MORTGAGE LOAN
Alexandra P. Everhart Sickler
August 15, 2014
(This was the FORTHCOMING
The Supreme Court is entertaining a divide among the federal circuits over whether the federal Truth in Lending Act (TILA) requires a consumer borrower to file a lawsuit in order to exercise her statutory right to rescind, or cancel, certain types of mortgage loans where the lender fails to disclose information mandated by the statute. Many have commented on the appropriate interpretation of the statute and its implementing regulation, but there is a gap in the academic literature addressing the circuit divide. This article goes beyond interpretation of the relevant statute and regulation to explore and consider unarticulated explanations for the majority-held view. That view holds that TILA implicitly requires a consumer borrower to file a lawsuit to exercise her right to rescind even though the statute expressly provides that written notice is sufficient. Five circuits have imposed this requirement even though Congress did not, explaining that they are constrained by Supreme Court precedent. That precedent is clearly inapposite, because the Supreme Court is reviewing an Eighth Circuit ruling on this issue. This article posits that some evolving trend, beyond stare decisis, underlies the majority circuits’ rulings. Among the possibilities the article explores are: (1) the federal judiciary’s interest in regulating consumer litigation behavior; (2) a paradigm shift in agency deference doctrine, including the reconsideration of Seminole Rock/Auer deference; and (3) disagreement with Congress’s liberalization of common law rescission by statute.
(This is from the FINAL ARTICLE linked below.)
Part I explains the relevant statutory and regulatory
framework that comprises TILA’s right to rescind. Part II
details the circuit split of authority on whether TILA requires a
consumer borrower to send notice or to file a lawsuit in order to
exercise her right to rescind (the rescission cases). Part III
reflects on the majority view, which required the filing of a
lawsuit in order to exercise the right to rescind. It considers
whether some other evolving trend underlies the majority
circuits’ view in the rescission cases. It also outlines possible
explanations for why the federal judiciary would require the
filing of a lawsuit where Congress did not intend it, which in
turn are explored in Parts IV, V, and VI. Specifically, in Part IV,
the article posits that the federal judiciary’s interest in
regulating consumer litigation behavior explains the majority
circuits’ rulings. Part V explores the possibility that the rulings
are another signal of a paradigm shift in agency deference.
Finally, Part VI considers whether the rulings reflect the federal
judiciary’s disagreement with Congress’s liberalization of
common law rescission by statute.
THE TRUTH SHALL SET YOU FREE
by Neil Garfield
Alexandra P. Everhart Sickler associate Professor of Law at North Dakota School of Law,
has done an excellent job in analyzing the legal precedent, the statutory provisions, the
agency rules, and the general attitude of the Courts that seek to restrict the effect of TILA
Rescission. Published by Rutgers Journal of Law and Public Policy, this is the best of
what I have read thus far. I see many parts that could be quoted in briefs
and memorandums of law.
© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.