4th Circuit: Larrabee v. Bank of America- Iqbal/Twombley Pleading of Truth In Lending Rescission Action


The Court of Appeals held that the Plaintiff had failed to state a plausible claim for relief under the TILA because her proposed reading of the notice disclosing the number and due dates of payments due under that transaction is not objectively reasonable. Further, because the disclosure to the Plaintiff of her right to cancel the 2007 credit transaction contained all of the information required by the TILA, 15 U.S.C.A. § 1635(a)-(b), and Regulation Z, 12 C.F.R. § 226.23(a)-(b), (d), the disclosure complied with the TILA.

The grant of summary judgment against the plaintiff she did not suggest that she was confused as to whether she could cancel the 2007 credit transaction without cost, nor did she put forth any evidence explaining how or suggesting that an average borrower faced with both the notice of right to cancel and the fee notice would be confused as to whether she could cancel the 2007 credit transaction without cost.… Read More

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4th Circuit: Watkins v. Sun Trust- Incorrect TILA Notice of Right to Cancel Form is not a Material Violation


The Debtors refinanced their home original Sun Trust mortgage again with Sun Trust, which provided the Model Form H-8 “Notice of Right to Cancel”, which is used for closed-end secured consumer credit transactions.  In fact it should have used Model Form H-9, which applies in a refinancing rather than new extension of credit.  Form H-9 differs from  Form H-8 in two ways- First, instead of Form H-8’s disclosure that the borrower is “entering into a transaction that will result in a security interest in your  home,” Form H-9 provides that “[y]ou are entering into a new transaction to increase the amount of credit previously provided to you.” Second, Form H-9 adds a sentence, “If you cancel this new transaction, it will not affect any amount that you presently owe.”

In a divided opinion, the Court of Appeals held that neither the Truth in Lending Act nor Regulation Z, which is promulgated by the Federal Reserve to implement TILA, makes a distinction between a refinancing and an initial financing. … Read More

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