10CV153 Daniels v. The Equitable Bank, S.S.B.

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Consumer Protection
TILA

It violates the Truth in Lending Act for a lender to have a borrower sign a postdated certificate stating he did not wish to rescind the loan.

“First, by having plaintiff sign a post-dated form electing not to rescind, Equitable violated the TILA requirement that it clearly disclose to plaintiff that he could rescind anytime in the next three days. See Elizabeth Renuart & Kathleen Keest, Truth in Lending, §§ 6.4.3.5, 6.4.3.9 (6th ed. 2007). This is so for several reasons. First, the statement that three days had elapsed since plaintiff had received notice of the right to rescind was false. The truth was that he received notice and the post-dated certificate simultaneously. Second, the certificate’s clear import was that plaintiff could no longer exercise the right to rescind. It stated that plaintiff warranted, covenanted and certified that he did not wish to rescind. Third, by presenting the form to plaintiff at the closing, Equitable likely caused him to conclude that he had to sign it in order to obtain the loan. In sum, Equitable’s conduct undermined the TILA requirement that Equitable clearly disclose to plaintiff that he could rescind the loan during the three days after the closing.”

“Equitable’s having plaintiff sign a post-dated election not to rescind also violated the TILA in another respect: it constituted an impermissible waiver of the three day right to rescind. Id. § 6.4.3.9. As indicated, the TILA strictly limits the right to waive the three day rescission right to specified emergency situations and it requires that the waiver be handwritten. The election that Equitable had plaintiff sign at the closing did not involve any emergency and was not handwritten.”

10CV153 Daniels v. The Equitable Bank, S.S.B.
E.D.Wis., Adelman, J.