00-1203 Clay, et al. v. Johnson, et al.

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“The district court believed that the position the Board announced in its proposed version of Comment 18(g)-4 was patently inconsistent with the position the Board announced in the adopted version of Comment 18(g)-4. The court noted that the Board initially indicated in its proposed comment that the ’30 days from’ language was not sufficient to satisfy TILA, then decided in its adopted version of Comment 18(g)-4 that this same language was sufficient. The court thought it was incongruous for the Board to characterize both of these positions as a clarification of the existing law; it did not believe that two such contradictory statements could both be clarifications. As a result, the court determined that the adopted rule must have been a change in the law that could not have a retroactive effect.

“We are convinced that the Board’s retraction of its initial position is not sufficient to tax the Board with inconsistency. The Board recognized that creditors were confused about what TILA required them to disclose with respect to the beginning payment date. See 63 Fed. Reg. at 16673. The Board was ‘aware that creditors could reasonably have interpreted the statutory requirement for specifying the “period of payments” in different ways.’ Id. Although the Board initially thought it proper to clarify the law by requiring creditors to disclose an exact date, it apparently thought better of that position following the comment period and in light of the comments it received.

“Because the difference between the Board’s proposed version of Comment 18(g)-4 and the adopted version of Comment 18(g)-4 is the only inconsistency to which the district court – and the plaintiffs on appeal – have pointed, we see no reason not to defer to the Board’s characterization of Comment 18(g)-4 as a clarification of the existing law. As such, Comment 18(g)-4 should be applied to the facts of this case.”

Reversed.

Appeal from the United States District Court for the Northern District of Illinois, Denlow, Mag. J., Ripple, J.