Plaintiff Creditor Using TILA as a Defense For Not Producing Documents

[yarnaholic]

What are everybody's thoughts about Creditor/Plaintiffs using 12 C.F.R. 226.25 from the Truth In Lending Act as a defense for not producing complete accounting statements? My understanding was that TILA was created to protect the consumer, not the creditor. My feeling is just because a creditor isn't REQUIRED to keep records over 2 years old, doesn't mean that they HAVE to destroy records over 2 years old. IMO, if a creditor thinks they might have to to to court to fight a consumer, they should probably hold onto the statements in order to show the total amount due. Are there any rules, regulations, or case law saying that a creditor SHOULD hold onto business records if they decide to sue? Preferably for Texas?

[2ndTimeAround]

....TILA was created to protect the consumer, not the creditor. ...are there any rules, regulations, or case law saying that a creditor SHOULD hold onto business records if they decide to sue? Preferably for Texas?

TILA provides that when a loan is based upon a consumer’s principal dwelling, that the consumer has a right to rescind the loan whenever the consumer protections in the law are violated. These include:

The bank’s failure to tender to the consumer copies of the “Right to Rescind” notice at the closing;

The bank fails to properly disclose the interest rates and interest payments the consumer will pay over the life of the loan;

The bank fails to properly disclose any finances charges built into the loan.

The statute of limitations for a claimant with the right to actual damages and statutory damages is three years from the date of the lender’s violation of TILA.

I don't know your loan details - if your actual loan interest rate is different than what is listed on your loan documents, you might have grounds to pursue an investigation. If this is not the case - it is false hope and a waste of time looking for a defense to save your home from foreclosure.

Read - Texas Foreclosures

https://docs.google.com/viewer?a=v&q=cache:gqgJwSPJpDcJ:www.texasbar.com/Content/NavigationMenu/ForThePublic/FreeLegalInformation/ConsumerTenantRights/FacingForeclosure.pdf+&hl=en&gl=us&pid=bl&srcid=ADGEESg6lJNZrTtbBrZrqOLKKm8P8GXFrd7sWVJw2TEXzoLXbH75jdk6GrYoxTyP5AqN1nYpZVBuknbE2LQG9ZzWTQQ7-bHTVDmUKwPKHcnBxGqa_5cyZm6wV8H_k5elCzUtab87BjNo&sig=AHIEtbQoHW7pRSvHhQ0f_8I46FWlhGg_tA

[BV80]

IMO, if a creditor thinks they might have to to to court to fight a consumer, they should probably hold onto the statements in order to show the total amount due. Are there any rules, regulations, or case law saying that a creditor SHOULD hold onto business records if they decide to sue? Preferably for Texas?

The record retention requirement for TILA is about compliance with the law. They have to keep 2 years of records to show they complied with TILA. It has nothing to do with keeping a complete accounting of a consumer's account from beginning to end.

§ 226.25 Record retention.

(a) General rule. A creditor shall retain evidence of compliance with this regulation (other than advertising requirements under §§ 226.16 and 226.24) for 2 years after the date disclosures are required to be made or action is required to be taken. The administrative agencies responsible for enforcing the regulation may require creditors under their

jurisdictions to retain records for a longer period if necessary to carry out their enforcement responsibilities under section 108 of the act.

[KentWA]

TILA only sets a minimum records retention for auditing purposes only and does not modify contract law. Have they produced a records retention policy? If they have not then I would push back with a Spoilation of Evidence motion.

[BrunoTheJDBkiller]

See the BofA case I posted in your other thread, very interesting related decision.

[BV80]

See the BofA case I posted in your other thread, very interesting related decision.

Unfortunately, the Newgard v. BofA case you cited was not in reference to TILA and record retention. The court's ruling was based upon a Wisconsin statute.

At ¶ 8:

The only remaining question under the statute, then, is whether the Banks have provided "writings evidencing any transaction . . . upon which [their] claim is made." WIS. STAT. § 425.109(2). We conclude they have not.

At ¶ 10:

Consistent with this purpose, WIS. STAT. § 425.109(1)(h) requires most creditors to attach "the writings, if any, evidencing the transaction" to their complaint. However, creditors on open-end credit plans may submit the required documentation if and when the customer requests it in writing. WIS. STAT. §§ 425.109(1)(h), (2).

BUT, depending on the other details of the case, this might be good case law for WI residents.

Edited November 20, 2012 by BV80

[BV80]

TILA only sets a minimum records retention for auditing purposes only and does not modify contract law. Have they produced a records retention policy? If they have not then I would push back with a Spoilation of Evidence motion.

Is there any court precedent that states a cc company has to provide a copy of their records retention policy? Or if they don't, it's considered considered spoliation of evidence?

Edited November 20, 2012 by BV80

[yarnaholic]

The record retention requirement for TILA is about compliance with the law. They have to keep 2 years of records to show they complied with TILA. It has nothing to do with keeping a complete accounting of a consumer's account from beginning to end.

§ 226.25 Record retention.

(a) General rule. A creditor shall retain evidence of compliance with this regulation (other than advertising requirements under §§ 226.16 and 226.24) for 2 years after the date disclosures are required to be made or action is required to be taken. The administrative agencies responsible for enforcing the regulation may require creditors under their jurisdictions to retain records for a longer period if necessary to carry out their enforcement responsibilities under section 108 of the act.

Right, so it really shouldn't be used as an excuse for the creditor/plaintiff to NOT provide the complete account history, correct? To me, it's sort of like keeping a receipt. I don't HAVE to keep any receipts, but I usually do just in case I decide I want to return something. It's just the prudent thing to do. A creditor may not be REQUIRED to keep complete account histories in the form of account statements, however it would seem like the smart thing to do just in case they have to prove total damages in court.

My question is, how would I argue this especially with regards to Plaintiff's Damages Sustained As A Result of Breach part of my MOSJ?

[BV80]

Right, so it really shouldn't be used as an excuse for the creditor/plaintiff to NOT provide the complete account history, correct? To me, it's sort of like keeping a receipt. I don't HAVE to keep any receipts, but I usually do just in case I decide I want to return something. It's just the prudent thing to do. A creditor may not be REQUIRED to keep complete account histories in the form of account statements, however it would seem like the smart thing to do just in case they have to prove total damages in court.

My question is, how would I argue this especially with regards to Plaintiff's Damages Sustained As A Result of Breach part of my MOSJ?

Whether or not it is prudent or smart is not the point. The law does not require them to keep the records. YOU have to show why they should, and you have to be able to support your assertion with either law or court precedent.

We may think they should have to keep the records and provide a complete accounting, but our opinion means nothing in court.

[Seadragon]

Is there any court precedent that states a cc company has to provide a copy of their records retention policy? Or if they don't, it's considered considered spoliation of evidence?

That is the area you work towards with spoilation of evidence you show how that those records could have shown violations of TILA and therefore the missing documents can be ruled to contain negative inferences that the records are not accurate, showed bad acts that would invalidate litigation on the unclean hands doctrine, and would have shown that the alleged account just magically came into existence from the dat the records start. The further reluctance of the OC to transfer the alleged account can be shown that the account was not valid ab intio.

we need further research on negative inferences from non production of evidence. Because I believe this is the cornerstone of defenses. We worry about evidence we get we should be trying to address the evidence we don't get.

[BrunoTheJDBkiller]

This case mentions this in a way;

In Newgard ex rel. Newgard v. Bank of America, 735 NW 2d 578 - Wis: Court of Appeals 2007, the Court stated: “¶ 15 Finally, the Banks argue the Estate's interpretation is absurd because it allows the Banks' customers — especially longstanding customers with higher balances — to escape their obligations when the Banks purge old records. However, this interpretation is no less absurd than the Banks' proposition that they must retain almost no records at all. We also note that the length of time the Banks retain records is within the Banks' control, as is the Banks' method of payment allocation.[4] We see nothing absurd about requiring the Banks to retain the records of charges for which they wish to collect payment. On remand, the court shall disallow all claims by the Banks based on transactions not shown on the records submitted by the Banks.

True, the law does not mandate that anybody keep anything. However, if a bank wants to go around syuing people, they should at least have the goods to back up the charge. It's always the same tired argument from them......can't prove this, don't have that, don't nned to have this, we mailed it to you so you must have gotten it, our figures are always correct, take our word for it, etc. You try it and see how far you get. Gee, that 75KB on your computer would have been too much to use up to store the application, huh? I love the way they try to hide behind TILA while they are violating it.

[BV80]

That is the area you work towards with spoilation of evidence you show how that those records could have shown violations of TILA and therefore the missing documents can be ruled to contain negative inferences that the records are not accurate, showed bad acts that would invalidate litigation on the unclean hands doctrine, and would have shown that the alleged account just magically came into existence from the dat the records start. The further reluctance of the OC to transfer the alleged account can be shown that the account was not valid ab intio.

we need further research on negative inferences from non production of evidence. Because I believe this is the cornerstone of defenses. We worry about evidence we get we should be trying to address the evidence we don't get.

I understand what you're saying, however you used the phrase "could have shown violations". The word "could" is a problem.

Whether we like it or not, our cc accounts are our responsibility. It's our job to look over our statements to make sure everything is correct and that there are no unauthorized charges, missed payments, etc. If we don't do so, that's our fault.

I believe that if we use the argument that the cc company is required to present every statement related to the account because there "could" be violations, or there could be missed payments or unauthorized charges, a judge will merely point out our responsibility for our account.

It can also depend upon your court's rulings. It your courts have stated that a bank doesn't have to account for every transaction, then the bank doesn't have to do it.

[BV80]

This case mentions this in a way;

In Newgard ex rel. Newgard v. Bank of America, 735 NW 2d 578 - Wis: Court of Appeals 2007, the Court stated: “¶ 15 Finally, the Banks argue the Estate's interpretation is absurd because it allows the Banks' customers — especially longstanding customers with higher balances — to escape their obligations when the Banks purge old records. However, this interpretation is no less absurd than the Banks' proposition that they must retain almost no records at all. We also note that the length of time the Banks retain records is within the Banks' control, as is the Banks' method of payment allocation.[4] We see nothing absurd about requiring the Banks to retain the records of charges for which they wish to collect payment. On remand, the court shall disallow all claims by the Banks based on transactions not shown on the records submitted by the Banks.

True, the law does not mandate that anybody keep anything. However, if a bank wants to go around syuing people, they should at least have the goods to back up the charge. It's always the same tired argument from them......can't prove this, don't have that, don't nned to have this, we mailed it to you so you must have gotten it, our figures are always correct, take our word for it, etc. You try it and see how far you get. Gee, that 75KB on your computer would have been too much to use up to store the application, huh? I love the way they try to hide behind TILA while they are violating it.

Newgard was based upon WI Statute § 425.109(2) that requires evidence of any transaction upon which a creditor's claim is made. The bank in the Newgard case didn't provide that evidence.

Not every state has a statute like the WI statute. In addition, not providing every cc statement doesn't mean they're violating TILA. We've actually been reading it wrong.

§ 226.25 does not state that they have to keep 2 years worth of cc statements.

A creditor shall retain evidence of compliance with this regulation (other than advertising requirements under §§ 226.16 and 226.24) for 2 years after the date disclosures are required to be made or action is required to be taken.

That regulation is about disclosure requirements. It's not about calculating a balance of an account.

Edited November 25, 2012 by BV80