U.S. Court of Appeals for the 7th Circuit
Consumer Protection – TILA — rescission
The district court did not abuse its discretion in giving borrowers 90 days to repay their loans as a consequence of TILA violations.
“There are several factors supporting the district court’s rejection of this installment plan. First, the Defendants here are not the wrongdoers. They are subject to liability as assignees, but they were not the ones responsible for the deficiencies in the disclosures giving rise to the Iroanyahs’ claims. Second, these TILA violations were hyper-technical disclosure deficiencies, which Iroanyahs’ admitted caused no actual harm. Third, since they remained in their home despite not making mortgage payments since 2008, the Iroanyahs have actually benefitted from the lengthy resolution of these TILA violations. Finally and decisively, the proposed installment plan would have been extremely inequitable for the Defendants, since it would effectively reform the original transaction to become an interest free loan. The district court had ample reason to reject the Iroanyahs’ wholly unreasonable installment plan, which would create a windfall for the Iroanyahs. Nothing in the district court’s opinion suggests an abuse of discretion in weighing these equitable factors and rejecting the Iroanyahs’ installment plan.”
Appeal from the United States District Court for the Northern District of Illinois, Feinerman, J., Cudahy, J.