Burson v. Capps

Summary

The Maryland Court of Appeals held that a borrower may not exercise the Truth in Lending Act’s right of rescission before the underlying loan transaction is consummated. Because Jeffrey Capps sent his rescission notice before signing the loan documents and before disbursement of the loan proceeds, the attempted rescission was ineffective, and the court did not reach the petitioners’ other arguments.

Holdings

1. A borrower may not invoke TILA's statutory right of rescission before the loan transaction is consummated. Before consummation, no consumer credit transaction or security interest exists to rescind, and a pre-consummation rescission notice is without effect.
2. The court did not reach the statute-of-limitations, waiver, or jurisdictional issues because its resolution of the pre-consummation rescission issue was dispositive.

Questions Presented

1. Whether a borrower may exercise the Truth in Lending Act's right of rescission before a consumer credit transaction has been consummated.
2. Whether the Court of Appeals needed to reach the timeliness, statute-of-limitations, waiver, or jurisdictional issues raised in the petition.

Disposition

reversed_and_remanded