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Truth in Lending: 13.3.4.2 Form of Non-Segregated Disclosures

While additional information may not be included with the segregated disclosures,157 additional information may be provided with other required CLA disclosures. But this additional information may not mislead or confuse the lessee or contradict, obscure, or detract attention from a required disclosure.158

Truth in Lending: 13.3.5.1 General

Regulation M and its official interpretations enumerate three disclosure inaccuracies that do not violate Regulation M: the effect of rounding numbers, unknown information, and the effect of subsequent occurrences. Because these are the only enumerated exceptions, and because any disclosure violation leads to statutory damages,173 any other lessor error should result in statutory damages, no matter how minor.

Truth in Lending: 13.3.5.3 Subsequent Occurrences

Subsequent occurrences may render disclosed information inaccurate, but such inaccuracy is not an Act violation.175 No new disclosures need be made if the lessor adds insurance after lease consummation because of the lessee’s failure to do so, official fees or taxes change, or an automobile is delivered late because of a strike.176 Nevertheless, new disclosures must be made for certain lease renegotiations and extensions.177

Truth in Lending: 13.3.5.4 Minor Variations

Lessors can disregard the effect of four factors in making disclosures: that payments must be collected in whole cents, that weekends or holidays affect when payments are due, that months have different numbers of days, and that February 29 occurs in a leap year.180 The implication is that other variations lead to disclosure violations if not properly accounted for by the lessor.181

Truth in Lending: 13.3.6.1 Description of Property

The lessor must provide a brief description of the leased property sufficient to identify the property to both the lessor and lessee.182 The model forms for vehicle leases disclose the vehicle’s year, make, model, body style, and vehicle identification number.183 The form for furniture leases lists the item’s name, color, stock number, manufacturer and quantity.184 A lease that misidentifies the property should violate the description requirement.

Truth in Lending: 13.3.6.2.4 Disclosure of rebates

A manufacturer or dealer rebate must be disclosed when it is “applied against the amount due at lease signing or delivery”206 but apparently does not have to be separately disclosed in the amount due at lease signing where the lessor opts instead to apply it to reduce the vehicle’s overall cost.

Truth in Lending: 13.3.6.2.5 Practice tips

In reviewing an automobile lease, compare the consumer’s understanding of rebates, trade-ins, and down payments with what is disclosed in the lease. If the consumer paid cash at lease signing, and this does not appear on the itemization of amount paid at lease signing, the dealer may have “swallowed” or stolen the down payment. Similarly, unless a trade-in has a negative or zero value, its failure to be itemized as an amount paid at lease signing is an indication the dealer swallowed its value.207

Truth in Lending: 13.3.6.3 Payment Schedule and Total Amount of Periodic Payments

The lessor must disclose the number, amount, and due dates or periods of payments scheduled under the lease, and the total amount of periodic payments.208 Disclosure that payments are monthly, with the first payment due January 1, 2019 and the last on December 1, 2023, is not sufficient. The lessor also must disclose that there are forty-eight payments.

Truth in Lending: 13.3.6.4 Other Charges

Charges that are not included in periodic payments or disclosed elsewhere must be disclosed as “other charges.”216 Lessors must disclose both a total and an individual itemization.217 If there is both a processing and a disposition fee not disclosed elsewhere, disclosure of each of these fees separately is not sufficient. There must also be a total of “other” charges.

Truth in Lending: 13.3.6.6.1 General

Special disclosures apply only to motor vehicle leases.238 The requirements do not apply to other forms of consumer leases. For example, the requirements do not apply to equipment to generate solar energy.

Truth in Lending: 13.3.6.6.2 Gross capitalized cost and the agreed-upon value of the vehicle

Gross capitalized cost is the first disclosure in the monthly payment derivation, defined at section 1013.2(f) [section 213.2(f)] as the amount agreed upon as the leased vehicle’s value and any items that are capitalized (paid for) during the lease term, including but not limited to taxes, insurance, service agreements, and any outstanding balance from a prior loan or lease.

Truth in Lending: 13.3.6.6.4 Capitalized cost reduction

Capitalized cost reduction is the second disclosure in the monthly payment derivation for motor vehicle leases,254 defined as the total amount of any rebate, cash payment, net trade-in, and noncash credit that reduces the gross capitalized cost.255 The lessor must use a description such as “the amount of any rebate, cash payment, net trade-in allowance, or noncash credit you pay that reduces the gross capitalized cost.”

Consumer Arbitration Agreements: 5.4.2.1 General

Whether a particular dispute falls within the scope of an arbitration clause is a matter of contract interpretation that turns on whether the language of the agreement, which sets out the types of disputes subject to arbitration, encompasses the dispute at issue as understood “based on the complaint’s factual allegations rather than the legal causes of action asserted.”83

Consumer Arbitration Agreements: 5.6.3b Telemarketers and Others Subject to the TCPA

In many cases involving telemarketers and unwanted robocalls there is no contract at all between the parties or entities related to the parties, so there can be no arbitration requirement. For example, no arbitration clause will protect a telemarketer that makes cold calls in violation of the FCC’s do-not-call list rule, the Telephone Consumer Protection Act (TCPA)’s prohibition against prerecorded telemarketing calls to residential lines, or its prohibition of robocalls to cell phones.

Consumer Banking and Payments Law: 11.2.8.1 E-Sign Preemption of UETA and Other State Law

This section deals with the issue of when E-Sign overrides state law, when state law is relevant regardless of E-Sign, and when—in rare circumstances—state laws supersede or displace E-Sign. Generally, E-Sign is an overlay on state law, meaning that it only preempts conflicting state law, while still allowing state law that does not conflict with E-Sign to prevail.