“Rendler requests this court to interpret the TILA as requiring a lender to provide a single document to a borrower, that reflects the total cost of a loan, regardless of the number or variety of loans that comprise a credit transaction. The heart of Rendler’s argument is that even though two distinct loans were issued, with two distinct and adequate disclosure statements, the subject matter of both loans was financing a single piece of real estate and therefore should be viewed as one transaction requiring one statement.
“We disagree. The TILA anticipates situations where two parties will conduct multiple transactions necessitating multiple disclosures to achieve one goal. Under 12 C.F.R. sec. 226.17(c)(6)(i), which applies to closed-end transactions, ‘[a] series of advances under an agreement to extend credit up to a certain amount may be considered as one transaction.’ (emphasis added). This section, in addition to the official commentary that accompanies the statute, makes it clear that the regulation encompasses situations where multiple credit transactions with multiple disclosures would be used to finance a single piece of property. The official commentary to Regulation Z has been regarded as an ‘authoritative interpretation’ of the TILA and Regulation Z by this court. In re Dingledine, 916 F.2d 408, 411 (7th Cir. 1990). The commentary also states that ‘creditors have flexibility in handling credit extensions that may be viewed as multiple transactions.’ 12 C.F.R. sec. 226, Supp. 1, 17(c)(1)- (16). As an example, the commentary notes that ‘[t]he separate financing of a down payment in a credit sale transaction may, but need not, be disclosed as two transactions (a credit sale and a separate transaction for the financing of the down payment).’ Id. In Rendler’s case, the home equity line of credit substitutes for the traditional down payment and therefore qualifies as a separate transaction. Despite the fact that both credit transactions involved a single piece of residential property, there were two distinct financial transactions – a first and a second mortgage. The commentary makes it clear that lenders have some flexibility in structuring loan transactions with each consumer, even multiple loan transactions financing a single piece of property. This is particularly true when these transactions are different types of loans. The disclosure requirements for open-end credit transactions and closed-end credit transactions are segregated into different sections of the regulations. The fact that each type of credit transaction has its own set of required disclosures indicates that the regulations are designed to control the credit transactions themselves and not the underlying property for which the credit is obtained. Because each of the loans that Rendler applied for was a separate transaction, Corus had the discretion under the Act to issue two disclosure statements.”
Appeal from the United States District Court for the Northern District of Illinois, Nolan, Mag. J., Manion, J.