David R. Beach, et Ux. v. Ocwen Federal Bank (523 U.S. 410)
U.S. Supreme Court · decided April 21, 1998 · Supreme Court Database (Spaeth)
- Citation
- 523 U.S. 410 · 118 S. Ct. 1408
- Decided
- April 21, 1998
- Term
- October Term 1997
- Vote
- 9–0
- Majority author
- Justice Souter
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice Souter delivered the opinion of the Court. Under the Truth in Lending Act, 82 Stat. 146, 16 U. S. C. § 1601 et seq., when a loan made in a consumer credit transaction is secured by the borrower’s principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately. See 15 U. S. C. § 1635. Under § 1635(f) of the statute, this right of rescission “shall expire” in the usual case three years after the loan eloses or upon the sale of the secured property, whichever date is earlier. The question here is whether a borrower may assert this right to rescind as an affirmative defense in a collection action brought by the lender more than three years after the consummation of the transaction. We answer no and hold that § 1635(f) completely extinguishes the right of rescission at the end of the 3-year period. I The declared purpose of the Act is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.” 15 U. S. C. § 1601(a); see Mourning v. Family Publications Service, Inc., 411 U. S. 356, 363-368 (1973). Accordingly, the Act requires creditors to provide borrowers…
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