CFPB Files First Amicus Brief in TILA Case

WASHINGTON — The Consumer Financial Protection Bureau said Tuesday that certain borrowers who did not receive required mortgage disclosures should have a right to cancel their loans, as long as they notify their lender within three years.

The bureau made the argument in an amicus — or "friend of the court" — brief it filed in a case before the Tenth Circuit Court of Appeals in Denver. This was the first time the bureau has filed such a brief, which will be a regular part of its work going forward, the agency said in a press release Tuesday.

The Truth in Lending Act specifies that borrowers who didn't receive appropriate disclosures have the right to cancel a loan by notifying their lender of the intent to cancel within three years. In the case of Rosenfield v. HSBC Bank, USA, the bank argued that the borrower must also file suit against the lender within three years.

The CFPB argued that borrowers do not need to do so.

"We are committed to making sure that borrowers can exercise their rights to the full extent allowed under this law," Director Richard Corday said in the press release. "The consumer's right to cancel gives lenders a powerful incentive to provide the disclosures that consumers need to make good financial choices."