The United States Supreme Court has discretion over which cases it chooses to review. This distinguishes the high court from federal circuit courts of appeal in that those courts must accept an appeal provided it is ripe for a case or issue to be heard by an appellate court. One category, however, of cases, in which the Supreme Court does seek to hear, are those in which the federal appellate circuits have taken conflicting positions on a significant issue that is re-litigated in different areas of the country.
With the filing of petitions for writ of certiorari in two cases out of the Eighth Circuit Court of Appeals, the Supreme Court will have the opportunity to resolve a split regarding the interpretation of the federal Truth-in-Lending Act, 15 U.S.C. § 1601 et seq. This statute imposes upon lenders in home mortgage transactions the duty to disclose certain specific information to borrowers so that borrowers can understand the significant terms and conditions of their loan transaction. It does give borrowers the right to rescind the transaction “until midnight of the third business day following . . . the delivery of the information and rescission forms required under this section . . . by notifying the creditor . . . of his intention to do so.” according to 15 U.S.C. § 1635(a). Subsection (f) of this same code section also createsa “[t]ime limit for [the] exercise of [this] right,” providing that the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction” even if the “disclosures required . . . have not been delivered.”
Some federal appellate circuits have found that, provided a written notice of rescission is properly sent to a lender within three years of the consummation of the loan, the rescission is effective. Other circuits, including the Eighth Circuit, take a different view. They require the borrower to actually file suit within this three year period. The question presented in two linked cases, Jesinoski v. Countrywide Home Loans, Inc. and Keiran v. Home Capital, Inc, is whether the Eighth Circuit erred in requiring the borrowers to incur the more onerous burden of filing suit to achieve rescission. The Supreme Court held a conference on April 18, 2014 in order to decide if it will accept these two cases so as to resolve this circuit split. It is likely the Court will make a decision on whether to accept certiorari – take the case- before the end of June.
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