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Consumer Banking and Payments Law: 1.2.1 Overview

Recent years have witnessed unprecedented innovations in forms of payments, while applicable law has struggled to keep up. Some forms of payment are loosely and unevenly regulated. Some transactions that are identical from the consumer’s perspective are in fact regulated by entirely different sets of laws.

Consumer Arbitration Agreements: Listing of Provisions

9 U.S.C. §§ 1–16

TITLE 9—ARBITRATION

Chapter 1 General Provisions

§ 1. “Maritime transactions” and “commerce” defined; exceptions to operation of title

§ 2. Validity, irrevocability, and enforcement of agreements to arbitrate

§ 3. Stay of proceedings where issue therein referable to arbitration

Truth in Lending: 1.2.11a Constitutional Challenges to the CFPB’s Authority to Implement TILA

Ideological hostility to the CFPB existed since the agency’s inception, and recent years have witnessed a spike in judicial challenges to the Bureau’s authority. Certain broad attacks have questioned the constitutionality of virtually every function of the Bureau. If accepted, these arguments could potentially undermine the Bureau’s rulemaking authority and bring into question the validity of the CFPB’s amendments to Regulation Z.

Truth in Lending: 1.2.1 Original Act

In 1968, after years of legislative study, fact-finding, compromise, and struggle, the United States Congress adopted and President Lyndon B. Johnson signed the Consumer Credit Protection Act (CCPA), which consisted of the Truth in Lending Act (Title I) and Restrictions on Garnishment (Title III).27 Passage followed decades of developments at the state level, which informed these federal developments.28 The Truth in Lending Act was landmark legislation.

Truth in Lending: 1.2.13.2 Amendments to Other Federal Mortgage Loan Related Laws

In addition to the TILA amendments in Public Law No. 115–174, the new law also includes provisions affecting other federal statutes relevant to practitioners handling mortgage cases. As described in NCLC’s Mortgage Lending,147 these changes can be found in the SAFE Mortgage Licensing Act; the Home Mortgage Disclosure Act (HMDA); and the Financial Institutions, Reform, Recovery and Enforcement Act (FIRREA) regarding appraisal standards.

Truth in Lending: 1.2.11 The Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (hereinafter the Dodd-Frank Act) was signed into law.116 As part of the sweeping changes in this financial reform bill, Congress amended TILA in title XIV of the Act to include a variety of substantive provisions relating to mortgage lending and servicing, and to provide for additional damages recoveries for certain of these violations.

Truth in Lending: 1.3.3 Effective Date of Title XIV Amendments That Require Implementing Regulations

Where title XIV requires regulations, the corresponding statutory provision takes effect on the date the regulations take effect.162 The same should be the case for any provision that cannot go into effect until another statutory provision with implementing regulations also goes into effect. An example would be where one provision requires disclosure of a term that is defined in another section, but where that other section requires regulations to implement the definition.

Truth in Lending: 1.5.3.3.1 General authority

The Truth in Lending statute authorizes the CFPB to depart from the statute in several clauses. Under 15 U.S.C. § 1604(a), the CFPB may implement regulations that “contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions,” although the statute explicitly carves out high-cost loans from this rule. (A separate statutory provision, 15 U.S.C.

Truth in Lending: 1.3.4.2 Most Court Decisions Use a January 21, 2013 Effective Date

One early federal court RESPA decision finds that Dodd-Frank § 1400(c)(3), which sets out a January 21, 2013 effective date, refers not just to paragraphs (c)(1) and (c)(2), but to any Dodd-Frank title XIV provision, whether rulemaking is required or not.183 It reached this conclusion because the title for section 1400(c) included a semi-colon instead of a colon: “Regulations; Effective Date.” The court found the use of a semicolon to mean that section 1400(c)(3) did not only refer back to paragraphs (c)(1) and (c)(2), but instead referred to

Truth in Lending: 1.5.3.1 History of Regulation Z and the FRB Interpretations

As Congress has recognized since the inception of TILA, the oversight of consumer credit is a full time job, beyond the capacity of a legislature. As a result, Congress delegated broad authority for the implementation of TILA to the Federal Reserve Board.219 The FRB responded by promulgating a comprehensive set of Truth in Lending rules known as Regulation Z, which has been in effect, in various forms, since July 1, 1969.

Truth in Lending: 1.3.4.1 Statutory Language Is Ambiguous

Dodd-Frank § 1400(c)(3) is ambiguous as to whether its January 21, 2013 effective date applies to a statutory provision where implementing regulations are not required.180 The key question is whether section 1400(c)(3) that sets the January 21, 2013 effective date refers only to section 1400(c)(1) and (c)(2) and thus to statutory provisions requiring regulations, or whether it applies to any Dodd-Frank title XIV provision, even those not requiring regulations.

Truth in Lending: 1.7 Getting Started: Quick Reference Checklist (Closed-End)

Evaluating a consumer credit transaction for TILA disclosure rule compliance consists at a minimum of three tasks: evaluating the accuracy of the numerical disclosures on their face; determining whether those numerical disclosures were made in accordance with TILA rules (including assessing the legitimacy of charges imposed); and evaluating the adequacy of the non-numerical disclosures under TILA rules.

Truth in Lending: 1.5.3.4.1 Introduction

On December 8, 2004, the FRB issued an advance notice of proposed rulemaking.295 This notice signaled the beginning of the FRB’s most systematic review of Regulation Z since 1980.296 The first phase produced final rules governing open-end credit with an emphasis on credit card transactions.297 The second phase addressed closed-end credit.298 Although the FRB issued some proposed rules as part of this