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’ filed a complaint against the bank for violating the Truth-in-Lending Act. The court found that the failure of the bank to note the pledged collateral on the Truth-in-Lending disclosure definitely violated the Act.

The court awarded $1,000 against the bank and awarded costs and attorney fees to the debtor. Marshall v. Security Bank of Hamilton, 132 B.R. 904.

Author: Charles R. Harroun, Attorney at Law