Opinion ID: 381256
Heading Depth: 2
Heading Rank: 2

Heading: the act's statute of limitations

Text: 42 Section 130(e) of the Act imposes a one-year statute of limitations on actions to redress violations of the Act. The Postows accepted Oriental's loan commitment and returned a signed copy of the commitment letter to Oriental along with the $305 stand-by fee in late September 1972; settlement of the house sale was on November 8, 1972. The Postows filed their complaint in the district court on November 6, 1973. 43 Oriental argues that if the Postows' acceptance of its loan commitment and their payment of the stand-by fee is the point at which the disclosures required by the Act should have been made, Oriental's violation occurred in late September, 1972, more than one year before the complaint was filed. The Postows argue that a violation indeed occurred when they accepted Oriental's commitment and remitted the stand-by fee, but that the violation continued until they were provided the required disclosures at settlement, two days short of a year before the complaint was filed. The district court found in favor of the Postows on this issue, and we affirm that ruling. 44 Because no reported Truth-in-Lending case had dealt with this precise statute of limitations issue, the district court relied primarily on cases dealing with continuing violations in other areas of the law. It found the reasoning in those cases persuasive in light of the policies of this Act. 45 We agree. Hanover Shoe v. United Shoe Machinery Corp., 392 U.S. 481, 502 n.15, 88 S.Ct. 2224, 2236, 20 L.Ed.2d 1231 (1968), found that a private antitrust action, brought in 1955 and based on a continuing business practice begun in 1912, was not barred by a six-year statute of limitations because the challenged conduct constituted a continuing and accumulating harm on Hanover. Accord Katz v. NLRB, 196 F.2d 411, 415 (9th Cir. 1952) (continuing unfair labor practice); Schokbeton Products Corp. v. Exposiac Industries, Inc., 308 F.Supp. 1366, 1367-68 (N.D.Ga.1969) (continuing antitrust violation). We find the analogy persuasive. The Postows' payment of the forfeitable stand-by fee without having the Act's required disclosures before them inhibited them from compar(ing) more readily the various credit terms available and it prevented them from avoid(ing) the uninformed use of credit, 15 U.S.C. § 1601 (1976), thus subverting the announced goals of the Act. 46 We do not think that this recognition of the nondisclosure violation as a continuing one is at all inconsistent with our principal holding that disclosure must occur before the stand-by fee is paid. The borrower in a situation like that presented here retains legal freedom to change his or her mind on taking the lender's credit up to the time the note is signed. If the nondisclosures are viewed as serious enough, however, the borrower may well renege and be required to forfeit the fee. Furtherance of the goals of the Act thus mandates both a requirement of disclosure before the stand-by fee is paid and recognition that if disclosure is not then made, the violation continues up to the time of settlement. 22 We therefore conclude that the district court's interpretation of the Act's statute of limitations is entirely consistent with the Act's remedial purposes. 23