Wednesday, June 13, 2007

Truth-in-Lending - "tolerance for accuracy" not an affirmative defense

Sterten v. Option One Mortgage Corp. - ED Pa. - March 22, 2007

The "tolerance for accuracy" provision of the Truth in Lending Act, 15 USC 1605(f), is not an affirmative defense under Rule 8(c) of the Federal Rules of Civil Procedure.

Where the creditor made it clear in the pleadings that the discrepancy in the finance charge ($57) came within the $100 limit of sec. 1605(f) of the TILA, the notice policies of the federal rules was satisfied. Section 1605(f) "defines the parameters of an element of the TILA violation. It does not create a defense. Only if the total of the improper finance charges exceeds $100 is there a violation." Where as here the discrepancy was less thatn $100, there is no statutory violation.

The federal rules "reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits."