SCOTUS: NO 3-year right of rescission without a TILA violation – Eat Crow, Garfield

Dear Neil Garfield:

You’ll find a serving serving of crow in the 8th Circuit’s post-Jesinoski Keiran v Home Capital, Inc., F. 3d 1127 opinion. After reading it, I imagine you will craft a huge apology to your LivingLies blog readers for misleading them for years about the proper understanding of TILA rescission AND of the Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 opinion.

Keirans propounded the same lame excuse as the Jesinoskis. They signed an acknowledgment of receipt of Right to Cancel disclosures, and later gave the court an affidavit claiming they only received one copy, instead of two, each. They appealed the judgment against them to the 8th circuit, then to SCOTUS which granted cert and remanded for consideration in light of Jesinoski. After trial and appeal, the 8th circuit affirmed the trial court’s denial of rescission and damages.

Keiran relied on the same false legal theory that you have espoused for years about TILA rescission, and yet, in the wake of Jesinoski, SCOTUS, the 8th Circuit, and USDC all agree that TILA rescission does NOT work the way you wish it did. The borrow gets NO 3-year right of rescission UNLESS a TILA violation occurred.

The SCOTUS instructs you from the Jesinoski opinion:

“The Truth in Lending Act gives borrowers the right to rescind certain loans for up to three years after the transaction is consummated. The question presented is whether a borrower exercises this right by providing written notice to his lender, or whether he must also file a lawsuit before the 3-year period elapses.”

There you have the question before the court: does conditional TILA rescission written notice or notice plus lawsuit within 3 years after consummation? Now the fun part, where SCOTUS explains TILA’s extended, conditional right to rescind requiring a TILA violation:

“Congress passed the Truth in Lending Act, 82 Stat. 146, as amended, to help consumers “avoid the uninformed use of 792*792 credit, and to protect the consumer against inaccurate and unfair credit billing.” 15 U.S.C. § 1601(a). To this end, the Act grants borrowers the right to rescind a loan “until midnight of the third business day following the consummation of the transaction or the delivery of the [disclosures required by the Act], whichever is later, by notifying the creditor, in accordance with regulations of the [Federal Reserve] Board, of his intention to do so.” § 1635(a) (2006 ed.).[*] This regime grants borrowers an unconditional right to rescind for three days, after which they may rescind only if the lender failed to satisfy the Act’s disclosure requirements. But this conditional right to rescind does not last forever. Even if a lender never makes the required disclosures, the “right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever comes first.” § 1635(f).”

My point: Neil Garfield, you have bloviated that SCOTUS, when it gets a case like Jesinoski back, will agree with YOUR interpretation of TILA rescission law, that a TILA violation is not a condition of the extended right to rescind. Well, SCOTUS did get precisely such a case in 2015 (Keiran), and the justices and the 8th Circuit panel made it clear that NO 3- year right of rescission exists in the absence of a TILA violation.

But who needs the Keiran opinion when Justice Scalia explained conditional TILA rescission PERFECTLY in the Jesinoski opinion?

Eat some crow. I’ll do you good.

Keiran – IF NO DISCLOSURE VIOLATION OCCURS, THE RIGHT TO RESCIND ENDS AT THE CLOSE OF THE THREE-DAY WINDOW.pdf