The TILA authorizes federal regulatory agencies to require banks to make monetary and other adjustments to the consumers’ accounts when the true finance charge or APR exceeds the disclosed finance charge or APR by more than a specified accuracy tolerance.[i] That authorization extends to unintentional errors, including isolated violations (e.g., an error that occurred only once or errors, often without a common cause, that occurred infrequently and randomly).
Under certain circumstances, the TILA requires federal regulatory agencies to order banks to reimburse consumers when understatement of the APR or finance charge involves:
- Patterns or practices of violations (e.g., errors that occurred, often with a common cause, consistently or frequently, reflecting a pattern with a specific type or types of consumer credit).
- Gross negligence.
- Willful noncompliance intended to mislead the person to whom the credit was extended.
Any proceeding that may be brought by a regulatory agency against a creditor may be maintained against any assignee of the creditor if the violation is apparent on the face of the disclosure statement or other documents assigned, except where the assignment was involuntary.[ii]
[i] 15 USCS § 1607