Court Opinion

ID: 9768217
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:50:16.469893+00
Date Added: 2024-06-11T07:30:38.137724
License: Public Domain

ON MOTION FOR REHEARING
The Appellee has filed a motion for rehearing urging several errors in our original opinion. First, it is again urged that the line drawn through the blanks after “Other” on the disclosure form shows that no after acquired property was to be covered by the security agreement. We believe the blanks were placed on the form to list property covered by the security agreement other than motor vehicles and household goods and appliances. For instance, if Ap-pellee proposed to have the security agreement cover a sailboat owned by a borrower, it would not describe that property under the categories “Motor Vehicles” or “Household Goods and Appliances,” but under “Other.” If the “Other” category was to list after acquired property, as Appellee asserts, how could that after acquired property be listed under “Other” at the time the disclosure form was completed and before the after acquired property was obtained? The point of error is overruled.
The Appellee next asserts that we erred in holding that the disclosure form did not adequately describe the type of security interest taken. An illustration of a description of a security interest is found in the excerpts from FRB letter of November 2, 1976, No. 1125, where there is approval of a security interest description as follows:
“ * * * This means that if a breach of this contract by the debtor occurs, the creditor may take possession of the collateral and sell it, all at debtor’s expense and for debtor’s account.” See CCH Consumer Credit Guide — Transfer Binder, para. 31,475, p. 66,708.
In this case, Appellee gave no such description of its security interest and it violated Section 226.8(b)(5) of Regulation Z. For reasons stated in the original opinion, the disclosure form was also defective because it did not disclose the ten-day limitation on after acquired property. The second point is overruled.
The third point complains of our rejection of the pamphlet defense and the adoption of the Ives case approach, which Appellee asserts has been overruled by subsequent congressional action. We disagree. The pamphlet provision concerning after acquired property was the subject of two staff letters. See FRB letter of August 22, 1974, No. 829, and FRB letter of December 30, 1975, No. 983. CCH Consumer Credit Guide — Transfer Binder, para. 31,151, p. 66,514, and para. 31,323, p. 66,605. The Court, in Pollock v. General Finance Corporation, 552 F.2d 1142 (5th Cir. 1977), considered both letters, rejected the staff conclusions, and held that the ten-day limitation on after acquired property must be disclosed. That decision was followed in Garza v. Allied Finance Company, 566 S.W.2d 57 (Tex.Civ.App.—Corpus Christi 1978, no writ), where the language in the disclosure form about other indebtedness and after acquired property is identical to the language in the form in this case.
We further conclude that the 1976 amendment, now a part of Title 15, Section *621640(f), U.S.C.A., is of no assistance to the Appellee in this ease. That amendment provides for a reliance on staff interpretations “under such procedures as the Board may prescribe therefor * * *(Emphasis added). Clearly, this is prospective in nature and only applies to interpretations after the legislative act in February, 1976. It has no retroactive effect to cover a 1969 pamphlet. See Black v. G. B. Enterprises Inc., No. 75-890 (U.S.D.C., D.C., January 6, 1977); 5 CCH Consumer Credit Guide, para. 98,229, p. 87,671. The point is overruled.
The next point complains about our holding that the testimony is insufficient to show a. reliance on the FRB pamphlet. Since the defense is not available in this case, the issue of reliance becomes moot and the point is overruled.
The last point urges we erred in holding that Appellant had a valid counterclaim under the Texas Consumer Credit Code. Since the ease must be reversed and the evidence may not have been fully developed on this issue, we sustain this point and remand the matter to the trial Court for further consideration when the evidence is fully developed. We believe our original holding that Chapter 4 of the Texas Consumer Credit Code does apply to credit unions, if they make loans under that Code, is correct. In this case, the evidence is clear that GECU was not licensed and did not operate under the Texas Consumer Credit Code. But that is not the controlling issue. The issue is whether this loan was made under the provisions of the Texas Consumer Credit Code. If not, then the trial Court was correct in denying the counterclaim; otherwise, it was in error on this issue. Point of Error No. 5 is sustained and the issue as to the counterclaim under the Texas Consumer Credit Code is remanded to the trial Court for determination after hearing further evidence.
PRESLAR, C. J., not sitting.