On Tuesday, the CFPB said that it had filed a friend-of-the-court brief in a case that currently sits before the Denver Circuit Court of Appeals involving a rule from the Truth In Lending Act. The case — Rosenfield v. HSBC, USA — pertains to the timeframe that a lender has to cancel certain home loans, such as second mortgages, Reuters reports.
“We are committed to making sure that borrowers can exercise their rights to the full extent allowed under this law,” CFPB Director Richard Cordray said, according to Reuters.
The CFPB said that it would continue to file these kinds of briefs if the opinions and views of the agency would be helpful to a court of law.
“Amicus briefs are an important way for the CFPB to ensure that the statutes it oversees are correctly and consistently interpreted by the courts, even in cases in which the CFPB is not itself named a part,” the CFPB said, Reuters reports.
In the amicus brief filed on Tuesday, the CFPB cited past cases involving TILA, arguing that some courts have previously misinterpreted the law, resulting in a negative impact on borrowers.
TILA permits a borrower to cancel loans, excluding first mortgages, within three days of signing, ensuring that the consumer has appropriate time to consider the terms of the loan. That time period may be extended to three years should the borrower not receive the appropriate paperwork.
The court is currently debating whether the borrower is required to file a suit against a lender within the three year period in order to cancel the loan. The CFPB, however, said that earlier statutes did not require such action.
“These courts have erroneously dismissed rescission lawsuits as untimely, leaving consumers unable to litigate their claims on their merits,” the CFPB said, according to Reuters.