Jesinoski v. Countrywide Home Loans, Inc. (13-684)

argument 13-684

Jesinoski v. Countrywide Home Loans, Inc.

Supreme Court of the United States 59 min 5 speakers 8 chapters transcribed 7 days ago official recording ↗

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What is the central legal question presented in Jesinoski v. Countrywide Home Loans?

John G. Roberts 0:03

We'll hear argument next in case

Mr. Frederick 0:04

13-684, Jesinoski v. Countrywide Home Loans. Mr. Frederick. Thank you, Mr. Chief Justice, and may it please the Court. The narrow question in this case is whether the Truth in Lending Act precision provision in 1635A requires borrowers to file a lawsuit to exercise their right to rescind. The answer is no, and the Court of Appeal should be reversed for three reasons. the plain language of Section 1635A, the statutory context of 1635, and the longstanding regulatory interpretation by the two agencies who have been charged with administering the provision. I'd like to start with the plain text of 1635A, and we've set out the language in the first page of our addendum to the blue brief, where a couple of things are quite important to take note of.

Mr. Frederick 0:58

One is that the rescission right, the mechanism that is set forth in the statute, is by notifying the creditor. And that's true whether the rescission occurs within three days or three years of the closing of the loan transaction. The second thing that's important to point out

Unknown 1:19

— It seems to me that it's common usage to, for instance, one could say on Election Day, you vote by going to the precinct and presenting identification. Now, that is not how you vote. That's a preliminary step to your voting. And I think that it's possible to read the by giving notice as to say that Where that's the only thing you have to do, as it is for the three-day cancellation, rescission, that's the end of it. But where there is something else to be done, where you have to return whatever you have received under the transaction, it seems to me more reasonable to read it as, you know, you vote by presenting yourself at the precinct and offering identifications.

Mr. Frederick 2:24

Well, Congress could have written Section 635A that way, but it didn't. And when it wrote by notifying, even if it was within the three-year period, Justice Scalia, it also provided that it had to be done in accordance with regulations of the Bureau. And when Regulation Z was promulgated in 1969, the Federal Reserve Bank took exactly the same position that we're arguing now, which is that the notification to the lender could occur in a writing that And they use their regulations to spell out. Wait, wait,

Unknown 2:54

wait, wait. By notifying in accordance with regulations. It seems to me speaks to the manner of notifying, not to the consequence of notifying. And Regulation Z may indeed say what the consequence is. But I don't think that the statute authorizes Regulation Z to say that.

Mr. Frederick 3:12

Well, the statute actually does say that in the B provision. Justice Scalia will get to that in a moment. But the point here is that nowhere in 1635A did Congress say you had to file a lawsuit, and nowhere in Regulation Z is there a provision that a borrower has to file a lawsuit in order to rescind. And remember, the definition of rescission is a unilateral cancellation of the transaction.

Unknown 3:35

Yes, but at common law, you had to give back what you had received, and you have — you are —

How does the petitioner's brief interpret the plain language of TILA §1635A?

Unknown 3:42

urging that the statute creates a system in which a creditor who has a secured interest, simply because somebody comes up almost three years later and says, you didn't give me two copies of this particular document, I got only one copy, and even if that's not true, immediately the secured interest is converted into an unsecured interest. That is a huge difference, and I find it difficult to believe that that's what Congress intended.

Mr. Frederick 4:16

Well, the language of the statute actually makes that very clear, and so do the regulations. And notably, Justice Scalia, in three places and three successive sentences in 1635A, Congress said the manner of rescission is going to be done in accordance with regulations. The disclosures that need to be done have to be done in accordance with regulations. And there have to be appropriate forms for the obligor to exercise his right to rescind, and that is also set forth in the regulations. So I don't think 1635A could be any clearer that it is notification by writing in accordance with the regulations set forth by the federal agencies.