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Truth in Lending: 2.7.9.3.3.1 Introduction

Property Assessed Clean Energy (PACE) programs are approved by local authorities under state legislation. These programs provide a financing option for energy efficiency improvements to residential and commercial properties that serves as an alternative to traditional loan structures.490 PACE allows a property owner to finance specific improvements by voluntarily contracting to allow the addition of an assessment to the property’s tax bill secured by a lien against the property.

Truth in Lending: 2.2.2.5 Non-Recourse Debts Are Still Debts

Companies that are trying to evade TILA sometimes claim that their products do not create a “debt” and therefore are not “credit” because the transaction is a non-recourse one, i.e., one in which the lender renounces recourse against the consumer personally for repayment.

Repossessions: 6.2.4.1 When Clients Should Object

A debtor’s attorney should consider several steps to assist a client threatened with repossession. The attorney can notify the creditor, preferably in writing, that the creditor is not allowed on the debtor’s property, that the debtor objects to any repossession attempts, and that the creditor should not use force, threats, or intimidation to obtain the collateral.

Repossessions: 6.3.6.4 Fourth Amendment Issues

In addition to constitutional due process rights, official involvement in self-help repossession may trigger rights under the Fourth Amendment, which prohibits unreasonable searches and seizures.225 The Supreme Court has held that a Fourth Amendment violation may occur when there is some meaningful interference with an individual’s possessory interest in property.226 Even if there is a dispute about ownership, an individual’s possession of property is protected by the Fourth Amendment.

Repossessions: 6.4.3 Threats; Inciting Violence or Creating a Risk of Injury

A breach of the peace occurs when the debtor is put in fear of immediate physical abuse or is provoked to use violence to protect their property interest.266 The Seventh Circuit approved of jury instructions that repossessors may use force in the process of withdrawing if necessary to repel force, but may not use force to repossess, and may use only such force in defending themselves as is necessary to enable them to withdraw.267

Repossessions: 5.3.3.3 The Court’s Jurisdiction to Issue Writ

A writ can be properly issued only if the creditor applies to a court that has both jurisdiction and proper venue to seize the debtor’s property. Some courts can only issue writs covering property in the same county as the court. Other states may allow suit to be brought in the county where the defendant is located, or does business, or where the contract was made.165 Under the Wisconsin Consumer Act, venue is jurisdictional.

Repossessions: 6.4.6.3 Residence

The courts discourage any unauthorized entry by the creditor into the debtor’s residence. Breaking and entering and other criminal law notions serve as strict standards in defining breach of the peace. The courts wish to protect the sanctity of the debtor’s home and discourage acts that may incite retaliatory violence.311 Any entry gained by breaking into a debtor’s residence, even during the debtor’s absence, is a breach of the peace.312

Repossessions: 6.4.7 Use of a Police Officer; Impersonation

If a police officer or other government official was present or assisted in the repossession and the taking was not pursuant to a writ of replevin, it may be sufficient state action to trigger due process standards.325 Not only can the government official be liable for the due process violation, but also the private repossessor can be liable where there is a joint engagement between the two, or where the private repossessor obtained significant aid from the government official, in what was essentially a joint ventu

Consumer Arbitration Agreements: 7.2.1 Coverage

The federal Truth in Lending Act (TILA) prohibits forced arbitration and similar procedures in connection with residential mortgage loans and open-end consumer credit plans secured by the consumer’s principal dwelling.36 The Truth in Lending Act defines a residential mortgage loan as “a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer’s dwelling to finance the acquisition or init

Consumer Arbitration Agreements: 7.4 Consumer Credit Involving Active Duty Military Personnel or Their Dependents

The federal Military Lending Act prohibits arbitration clauses in consumer credit agreements with military personnel or their dependents, or the enforcement of such a consumer credit agreement.71 An arbitration requirement is unenforceable even after the consumer is no longer a servicemember or a dependent of a servicemember, as long as the consumer was covered by the Act when the credit was originated.72 In determining whether a borrower is a covered servicemember, a safe harbor is provided

Consumer Arbitration Agreements: 7.4a.1 General

Under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASASHA), 9 U.S.C. § 402(a), at the election of the individual or class representative alleging sexual assault or sexual harassment, predispute arbitration agreements or predispute joint-action waivers are unenforceable with respect to cases filed under federal, tribal, or state law relating to sexual harassment or sexual assault.85

Consumer Arbitration Agreements: 7.4a.2 Retroactive Effect Limited

The EFASASHA applies with respect to any “dispute or claim” that arises or accrues on or after March 3, 2022.97 While this language is subject to differing interpretations, at least some courts have required that the actual sexual harassment or assault occur after March 3, 2022, not just that the case be filed, or pre-litigation activity regarding the dispute commence, after March 3, 2022.98 On the ot

Unfair and Deceptive Acts and Practices: 2.5.3.4 Preemption Issues for State-Chartered FDIC-Insured Banks and Other State Lenders

National Bank Act (NBA) and Home Owners Loan Act (HOLA) preemption applies just to depositories regulated under those statutes—national banks and federal savings associations, respectively. This preemption does not directly apply to state-chartered banks, savings associations, or credit unions.2498 Nevertheless, NBA or HOLA preemption does have an indirect impact on state-chartered depositories.

Unfair and Deceptive Acts and Practices: 2.5.8.5.1 Non-prescription medications

The Food, Drug, and Cosmetic Act (FDCA) includes an express preemption provision regarding non-prescription medications.2652 A court applied this provision to preempt a claim that a sunscreen manufacturer violated the UDAP statute by using terms such as “waterproof” that the FDA did not formally ban until later.2653 However, another court held that FDA regulations that set labeling requirements for sunscreen and prohibit certain misleading claims do not preempt a claim that a seller violated

Unfair and Deceptive Acts and Practices: 2.5.8.5.3 Cosmetics

The FDCA also includes an express preemption provision regarding labeling and packaging of cosmetics.2660 This provision did not preempt a UDAP claim alleging that a cosmetic’s brand name, “Active Naturals,” was deceptive when the product had synthetic ingredients, as this claim did not relate to the ingredient list mandated by the FDA.2661 On the other hand, the Second Circuit held that the Food and Drug Administration’s rules about volume and weight labels preempt