complied with § 1635 and/or its regulations. See e.g., Valentine v. Influential Savings and Loan Association, 572 F. Supp. 36, 38 (E.D. Pa. 1983). The consumer must exercise his or her right by notifying the creditor of rescission. 15 U.S.C. § 1635(b). Upon rescission, the creditor is no longer liable for finance charges, and the security interest held by the creditor becomes void. Id.
a. The Right to Rescind
The plaintiff alleges three TILA violations as the basis for her right to rescind. While defendant's failure to disclose the personal property insurance charge as a finance charge is of questionable materiality, the transaction may be rescinded on a finding of either early disbursal of funds or the past-dating of the certificate of confirmation.
Plaintiff asserts that she had contact with the defendants on only one occasion. She maintains that no documents related to the loan transaction were signed by her at any time other than her visit to the defendants' office on July 18, 1984. While Fidelity denies post-dating any documents, the company offers no evidence indicating that the check and Certificate of Confirmation were signed on a date other than July 18. The defendants do not claim that the plaintiff visited their office on or after the dates appearing on the check or Certificate. The defendants do not claim that the documents were mailed to and returned by the Plaintiff. The defendants do not claim that a representative from their office visited the plaintiff on or after the dates appearing on the check and Certificate. The defendants offer no explanation for the car dealership's release of a financed car on the same day the loan documents were signed. At no point in their Memorandum do the defendants deny that the plaintiff had contact with them on only one occasion. The defendants merely state that the plaintiff admitted at deposition that she had no memory of signing a check or knowledge of when the funds were disbursed, and that the fact that the two documents were dated July 23, 1984 "speaks for itself." The defendants are mistaken.
In Laubach v. Fidelity Consumer Discount Company, supra, this Court recently found the same defendants who appear in this case in violation of TILA and the regulations promulgated pursuant to that Act. The violations alleged in Laubach were identical to those claimed here. This Court found that although the defendants designed the transaction so that it appeared to technically comply with TILA's requirements, the procedures violated "both the letter and the intention of the Act and its regulations."
As in Laubach, supra, the defendants in the instant case circumvented the mandatory three-day rescission period by having the plaintiff sign a post-dated certificate of confirmation at the commencement of the period. By having the plaintiff sign a post-dated check on the day the transaction was consummated, the defendants deprived the plaintiff of the benefits and protections she was given by law. As noted earlier, TILA's rescission provisions are designed to permit consumers time to think about the terms of their financial commitment. By post-dating documents central to the loan and security commitment, the defendants effectively foreclosed the plaintiff from exercising her statutory right to rescind. In sum, the defendants failed in their legal obligation to provide clear notice to the plaintiff of her rescission rights in direct violation of § 1635(a).
Because the § 1635(a) violations discussed above, the plaintiff was permitted to rescind the loan agreement at any time within three years of its consummation. She timely rescinded the agreement with Fidelity by letter dated June 17, 1986.
b. Civil Penalty
Because the defendants acted in controvention of TILA, they are subject to the civil penalties provided for in § 1640(a). The plaintiff's payment of finance charges exceeded the $1,000.00 maximum. Her civil penalty recovery is therefore limited to $1,000.00.
An appropriate Order follows.
AND NOW, this 26th day of March, 1987, upon consideration of the parties' cross-motions for summary judgment, it is hereby Ordered that:
1. Defendants motion for summary judgment is DENIED.
2. Plaintiff's motion for summary judgment is GRANTED.
3. The loan agreement dated July 18, 1984 was validly rescinded on June 17, 1986.
4. The defendants shall pay the plaintiff $1,000 in statutory penalties within twenty (20) days from the date of this Order.
5. Plaintiff is not liable for any finance charges or other charges arising from the rescinded transaction.
6. Defendant shall terminate and satisfy the mortgage it holds on plaintiff's residence upon payment by plaintiff of $807.85, representing the balance due on the loan principal. For purposes of this paragraph, "principal" includes all cash payments, totalling $4,412.62, made on the loan of $8,225.76, and does not include any charges eliminated by paragraph 5 of this Order. In determining the principal balance, plaintiff has received credit for all payments made over the life of the transaction.
7. Plaintiffs shall submit, not later than twenty (20) days from the date of this Order, full and complete affidavits reflecting their attorney's fees and costs pursuant to 15 U.S.C. § 1640(a)(3).
AND IT IS SO ORDERED.
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