Alert July 01, 2008

Federal Court Dismisses “Hyper-Technical” TILA Claim

A federal judge in Alabama dismissed a suit against a lender claiming the three day right of rescission under the Truth in Lending Act should be extended to three-plus years because the notice of right to cancel did not include the actual signing date and the final date on which rescission rights expire. The lender’s notice included a statement that plaintiffs had a right to rescind the loan within three business days of the latest of the closing date, the TILA disclosure date, or the notice of right to cancel date, but left blank what the actual last date was. The court held that failure to provide the actual date rescission rights expire may be a hyper-technical violation of TILA, but that the form “provided the requisite clear and conspicuous notice” of rescission rights and that the technical violation is not sufficient in the Eleventh Circuit to extend the normal three day rescission period to three years. Click here for a copy of McMillian v. AMC Mortgage Services, Inc., No. 07-0773 (S.D. Ala. Jun. 10, 2008).