Most of our fifty States have adopted the Uniform Commercial Code (UCC), which prescribes the method for a creditor to perfect security interests in collateral. Credit unions utilize the UCC filing provisions to perfect their security interest in items pledged as collateral on a loan, such as on a vehicle. Once a creditor files the […]

Federal Right of Rescission applies to additional funds advanced with refinance.   The Truth in Lending Act (TILA) was adopted by Congress to promote the informed use of consumer credit. Consumers may rescind a credit transaction within three business days of its consummation where the lender acquires a mortgage interest in the debtor’s principal dwelling as security. […]

Borrower moving collateral to another State dissolved security interest when creditor did not file a financing statement in Georgia within four months after the debtor moved to that state. Facts: 1. Debtor, Specialty Contracting and Supply Company, granted a security interest in its equipment, among other items of collateral, to one Richard Fraley; Fraley was an officer […]

Security State Bank of Hamilton issued a loan of nearly $17,000 to Jerry and Henrietta Marshall in exchange for the Marshall’s pledge of a security interest in the debtors’ new car. Debtors signed the promissory note and pledge of security. The bank’s personnel, however, failed to identify the pledged security on the Truth-in-Lending disclosure. Debtors’ […]

General Motors Acceptance Corporation issued a loan to debtor secured by debtor’s new automobile. The debtor purchased disability insurance through GMAC which provided that payments on the loan would be made to GMAC by the insurance company if the debtor became disabled. Debtor did, indeed, become disabled when she suffered a stroke. A claim was […]

Refiananced Loan after Bankruptcy Discharge is unenforceable.   Creditors cannot re-write or refinance a discharged loan after the debt was discharged in bankruptcy.   In the case of Charles Artzt v. Lindale National Bank, 145 B.R. 866, the debtor owed more than $31,000 to Lindale National Bank (the “bank”). Debtor filed a Chapter 7 bankruptcy […]

Defective Notice of Right to Cancel results in Truth in Lending Violation and extends borrowers right to rescind. Here, New Maine National Bank granted a loan to the debtors secured by debtors’ residence. At the closing of the loan, the loan officer supplied the debtors with a “Notice of Right to Cancel” (hereinafter “Notice”). Pursuant to the […]

In this case, the court upheld a lower court ruling in favor of the credit union. Here, debtors McClellan and Hoyt, were, respectively, the president and secretary of Calistoga Court Club, Inc. Calistoga applied for and received a loan for $30,420 from a predecessor in interest to Mountain America Credit Union. The loan went into default and […]

Credit Union Violates Truth in Lending Act, but Court denies co-borrowers Right of Rescission of mortgage, as mortgage was not on co-debtors’ primary residence.    Here, the Coxes (Borrowers) were indebted to Knox County School Employees Credit Union. Debtors wanted to borrow additional funds from the credit union to be secured by their residence.   Debtors did […]

In this case, a jury awarded the debtor $46,225 plus punitive damages of $100,000. Here, Pioneer Savings loaned $39,000 to Lannigan secured by the debtor’s real estate. The initial interest rate was “8 1/2%”. The loan documentation provided that Pioneer: … may hereafter decrease said interest rate and may also increase the rate upon giving […]