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Pfennig v Household Credit Service, Inc. and MBNA America Bank, N.A.

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If you're new to banking, you've undoubtedly run into references to the Rodash case, but may not know the background. The opinion of the I1th Circuit Court of Appeals in this landmark case is not available online but we have included a summary because of its importance and the effect the case had regarding subsequent changes made to TILA and Regulation Z.
In Rodash the court allowed plaintiffs to rescind a mortgage as a result of minor TILA violations. (The lender had failed to include a $204 Florida intangible tax and a $22 Federal Express fee in the calculation of the finance charge and the plaintiff was therefore entitled to rescind her mortgage as a result of the lender's failure to do so.)

The Economic Growth and Regulatory Paperwork Reduction Act of 1996 (Public Law 104-208) contained so-called "Rodash amendments", designed to protect lenders from certain Truth in Lending Act rescission claims based on small errors in disclosure of finance charges in residential mortgage loans. The protection of the "Rodash" Amendments is limited to "any closed end consumer credit transaction that is secured by real property or a dwelling that is subject to [the Truth in Lending Act]." See Lucy Griffin's articles "TIL Amendments: Fixing "Rodash" and other problems" and "Truth In Lending: "Certain" Security Interest Charges".

(see also the Thompson v. Irwin Home Equity Corp. decision indexed above under the "Arbitration" category, which deals with compelling borrowers to use arbitration to determine if they have a right to seek rescission.)

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