U.S. Supreme Court Clarifies that TILA Rescission is Effective upon Written Notice, not Dependent up U.S. Supreme Court Clarifies that TILA Rescission is Effective upon Written Notice, not Dependent up

U.S. Supreme Court Clarifies that TILA Rescission is Effective upon Written Notice, not Dependent upon the Filing of a Lawsuit

The Truth in Lending Act (“TILA”) affords certain loan borrowers the unconditional right to rescind a loan transaction within three days after the transaction, or within three years after the transaction if the lender failed the TILA’s disclosure requirements.   In a brief and unanimous opinion, the U.S. Supreme Court resolved a Circuit split on this question: when a borrower alleges that the lender failed the disclosure requirements, does the TILA allow the borrower to rescind by merely giving written notice within three years after closing, or must a borrower file a lawsuit within three years to preserve the rescission right?  The Supreme Court, in short shrift, concluded that the TILA’s plain language establishes that a borrower need only give written notice; the borrower need not file a lawsuit within the three-year period. Jesinoski unequivocally answered the question that has been percolating among lower courts for many years.  

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
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