The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) threw its weight into the courtroom recently by filing a friend-of-the-court brief in the U.S. Court of Appeals for the tenth circuit.[IMAGE]
The issue at stake: Whether homeowners can cancel their loans within a three-year period stipulated under the Truth-in-Lending Act ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô and whether a plaintiff need sue within the same timeframe before the right of rescission expires.
The case in Denver involves one Jean Rosenfield, who sued for an injunction against servicer HSBC in 2009 when an earlier[COLUMN_BREAK]
notice of rescission went unnoticed.
The bureau argued that Rosenfield had met the minimum standards for rescission by filing it and that she required adequate disclosure forms from her servicer before it moved forward with foreclosure for her property.
The CFPB also charged that earlier courts have ""erroneously"" thrown out rescission lawsuits on the presumption that a homeowner needs to file notice of rescission within three years.
""Many courts incorrectly restrict consumers' rescission rights under TILA by concluding that consumers must both exercise their right of rescission ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô by providing notice to their lenders ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô within three years of the loan's consummation, and sue their lenders within that same three-year period to resolve any disputes that arise regarding the rescission,"" it said in the brief.
The CFPB said that it plans to invoke the same legal authority by filing amicus briefs in appellate cases from three other circuits.
""We are committed to making sure that borrowers can exercise their rights to the full extent allowed under this law,"" CFPB Director Richard Cordray said in a statement. ""The consumer's right to cancel gives lenders a powerful incentive to provide the disclosures that consumers need to make good financial choices.""