Alert June 16, 2009

Federal Appeals Court Affirms Dismissal of an Untimely TILA Rescission Claim Based on Omission of the Closing Date on Rescission Notice

The First Circuit ruled that a borrower’s right to rescind under the Truth in Lending Act was not extended where the failure to include the precise closing date on the rescission notice is the only alleged violation. Plaintiff claimed that his notice was defective as a result of the omitted date, and that his right to rescind should therefore be extended to three years. The First Circuit rejected this argument, holding that mere technical violations of TILA which could not mislead a reasonable borrower, such as the rescission notice here which included the three alternative deadlines which trigger the TILA rescission right, are not grounds for extending the rescission period. The Court found a borrower of average intelligence would not have been confused by the omitted closing date, given the inclusion of the required deadlines. Click here for Melfi v. WMC Mortgage Corp., C.A. No. 09-1066 (1st Cir. June 11, 2009)