On November 30, 2022, the CFPB filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit to defend the Truth in Lending Act (TILA), which contains important protections for consumers who have both a credit card account and a savings or checking account with the same bank. TILA prohibits banks from unilaterally taking money from consumers’ deposit accounts to cover their credit card debt.
The CFPB’s amicus brief was filed in relation to a case where the borrower held a PNC Bank credit card that could access a home-equity line of credit (HELOC). When the consumer fell behind on his HELOC payments, PNC withdrew several thousand dollars from his PNC deposit accounts to cover that debt. The bank apparently did so without any warning, without any authorization from the consumer, and even though TILA and its longstanding regulations make that practice illegal.
The consumer sued PNC for violating TILA, and the bank incorrectly claimed that it qualified for an exception to the statute. The bank also argued that, because the credit card was tied to a home-equity line of credit, it did not count as a “credit card account” under TILA or the relevant regulations. The CFPB’s amicus brief explains that this misreads TILA and that the result would be an exception that Congress didn’t want and that the regulations don’t provide.
Read the CFPB’s article here.
The amicus brief can be found here.