I Declare Rescission!!

Justice Scalia, writing for a unanimous Court, concluded that to effect rescission under the Truth in Lending Act a debtor need only notify the creditor, in accordance with the CFPB's regulations of his intention to do so. In Jesinoski v. Countrywide Home Loans, Inc., the debtor mailed a letter purporting to rescind a refinance loan originated exactly three years to the day. The creditor replied within three weeks denying the validity of the rescission. A year later, the debtor filed suit seeking a declaration of rescission and damages. The district court granted the creditor judgment on the pleadings concluding that a debtor must file suit seeking rescission within three years of consummation. The Eighth Circuit affirmed.

The Supreme Court found section 1635(a) to be unequivocal. A borrower "shall have the right to rescind . . . by notifying the creditor, in accordance with the regulations of the Board, of his intention to do so." The regulations do require sending a writing but not receipt. See 12 C.F.R. § 226.23(a)(2) ("To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor's designated place of business."). The Supreme Court has simplified the first step in the rescission process but has made the remaining steps much more complicated.

The five-page opinion showed little regard for any contrary creditor argument or the circuit split. It viewed the unambiguous statutory language to require only that the debtor...

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