In the case William T. Lyons v. PNC Bank, N.A., the U.S. Court of Appeals for the Fourth Circuit addressed two key issues involving the Truth in Lending Act (TILA) and the Real Estate Settlement Practices Act (RESPA), both related to Home Equity Lines of Credit (HELOCs).
The case involves a court-appointed receiver tasked with distributing assets recovered from a Ponzi scheme involving over 230 investors who were defrauded by Kevin Merrill, Jay Ledford, and Cameron Jezierski. The appellants, two groups of investors (the Dean Investors and the Connaughton Investors), challenged the district court's approval of the receiver's plan to distribute the recovered assets.
The receiver proposed to use the "Rising Tide" method to distribute funds. The Rising Tide method:
