(Slip Opinion) OCTOBER TERM, 2014 1
NOTE: Where it is feasible, a syllabus (headnote) will be released, as isbeing done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
JESINOSKI ET UX. v. COUNTRYWIDE HOME LOANS, INC., ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
No. 13–684. Argued November 4, 2014 — Decided January 13, 2015
Exactly three years after borrowing money from respondent Countrywide Home Loans, Inc., to refinance their home mortgage, petitionersLarry and Cheryle Jesinoski sent Countrywide and respondent Bank of America Home Loans, which had acquired Countrywide, a letterpurporting to rescind the transaction. Bank of America replied, refusing to acknowledge the rescission’s validity. One year and one daylater, the Jesinoskis filed suit in federal court, seeking a declarationof rescission and damages. The District Court entered judgment onthe pleadings for respondents, concluding that a borrower can exercise the Truth in Lending Act’s right to rescind a loan, see 15 U. S. C. §1635(a), (f), only by filing a lawsuit within three years of the datethe loan was consummated. The Jesinoskis’ complaint, filed four years and one day after the loan’s consummation, was ineffective. The Eighth Circuit affirmed.
Held: A borrower exercising his right to rescind under the Act need only provide written notice to his lender within the 3-year period, not filesuit within that period. Section 1635(a)’s unequivocal terms—a borrower “shall have the right to rescind . . . by notifying the creditor . . . of his intention to do so” (emphasis added)—leave no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind. This conclusion is not altered by §1635(f), which states when the right to rescind must be exercised, but says nothing about how that right is exercised. Nor does §1635(g)—which states that “in addition to rescission the court may award relief . . . not relating to the right to rescind”—support respondents’ view that rescission is necessarily a consequence of judicial action. And the fact that the Act modified the common-law condition precedent to rescission at law, see §1635(b), hardly implies that the Act thereby codified rescission in equity. Pp. 2–5. 729 F. 3d 1092, reversed and remanded. SCALIA, J., delivered the opinion for a unanimous Court.
Cite as: 574 U. S. ____ (2015) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in thepreliminary print of the United States Reports. Readers are requested tonotify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in orderthat corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
LARRY D. JESINOSKI, ET UX., PETITIONERS v. COUNTRYWIDE HOME LOANS, INC., ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
[January 13, 2015]
JUSTICE SCALIA delivered the opinion of the Court.
The Truth in Lending Act gives borrowers the right to rescind certain loans for up to three years after the transaction is consummated. The question presented is whether a borrower exercises this right by providing written no- tice to his lender, or whether he must also file a lawsuit before the 3-year period elapses.
On February 23, 2007, petitioners Larry and CheryleJesinoski refinanced the mortgage on their home by borrowing $611,000 from respondent Countrywide HomeLoans, Inc. Exactly three years later, on February 23,2010, the Jesinoskis mailed respondents a letter purporting to rescind the loan. Respondent Bank of America Home Loans replied on March 12, 2010, refusing to acknowledge the validity of the rescission. On February24, 2011, the Jesinoskis filed suit in Federal District Court seeking a declaration of rescission and damages.
Respondents moved for judgment on the pleadings, which the District Court granted. The court concluded that the Act requires a borrower seeking rescission to filea lawsuit within three years of the transaction’s consummation. Although the Jesinoskis notified respondents of their intention to rescind within that time, they did not file their first complaint until four years and one day after the loan’s consummation. 2012 WL 1365751, *3 (D Minn., Apr. 19, 2012). The Eighth Circuit affirmed. 729 F. 3d 1092, 1093 (2013) (per curiam).
Congress passed the Truth in Lending Act, 82 Stat. 146,as amended, to help consumers “avoid the uninformed useof credit, and to protect the consumer against inaccurate and unfair credit billing.” 15 U. S. C. §1601(a). To this end, the Act grants borrowers the right to rescind a loan “until midnight of the third business day following the consummation of the transaction or the delivery of the [disclosures required by the Act], whichever is later, bynotifying the creditor, in accordance with regulations of the [Federal Reserve] Board, of his intention to do so.” §1635(a) (2006 ed.).* This regime grants borrowers anunconditional right to rescind for three days, after which they may rescind only if the lender failed to satisfy the Act’s disclosure requirements. But this conditional right to rescind does not last forever. Even if a lender never makes the required disclosures, the “right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever comes first.” §1635(f). The Eighth Circuit’s affirmance in the present case rested upon its holding in Keiran v. Home Capital, Inc., 720 F. 3d 721, 727–728 (2013) that, unless aborrower has filed a suit for rescission within three years of the transaction’s consummation, §1635(f) extinguishesthe right to rescind and bars relief.
*Following the events in this case, Congress transferred the authotity to promulgate rules implementing the Act to the Consumer Finance Protection Bureau. See Dodd-Frank Wall Street Reform and Consumer Protection Act, §§1061(b)(1), 1100A(2), 1100H, 124 Stat. 2036, 2107,2113.
That was error. Section 1635(a) explains in unequivocal ——————terms how the right to rescind is to be exercised: It provides that a borrower “shall have the right to rescind . . .by notifying the creditor, in accordance with regulations of the Board, of his intention to do so” (emphasis added). The language leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind. It follows that, so long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also requirehim to sue within three years.
Nothing in §1635(f) changes this conclusion. Although §1635(f) tells us when the right to rescind must be exercised, it says nothing about how that right is exercised. Our observation in Beach v. Ocwen Fed. Bank, 523 U. S. 410, 417 (1998), that §1635(f) “govern[s] the life of the underlying right” is beside the point. That case concerned a borrower’s attempt to rescind in the course of a foreclosure proceeding initiated six years after the loan’s consummation. We concluded only that there was “no federal right to rescind, defensively or otherwise, after the 3-yearperiod of §1635(f) has run,” id., at 419, not that there was no rescission until a suit is filed.
Respondents do not dispute that §1635(a) requires only written notice of rescission. Indeed, they concede that written notice suffices to rescind a loan within the first three days after the transaction is consummated. Theyfurther concede that written notice suffices after that period if the parties agree that the lender failed to makethe required disclosures. Respondents argue, however,that if the parties dispute the adequacy of the disclosures—and thus the continued availability of the right torescind—then written notice does not suffice.
Section 1635(a) nowhere suggests a distinction betweendisputed and undisputed rescissions, much less that a lawsuit would be required for the latter. In an effort to sidestep this problem, respondents point to a neighboring provision, §1635(g), which they believe provides supportfor their interpretation of the Act. Section 1635(g) states merely that, “[i]n any action in which it is determined thata creditor has violated this section, in addition to rescission the court may award relief under section 1640 of thistitle for violations of this subchapter not relating to the right to rescind.” Respondents argue that the phrase “award relief ” “in addition to rescission” confirms that rescission is a consequence of judicial action. But the fact that it can be a consequence of judicial action when §1635(g) is triggered in no way suggests that it can onlyfollow from such action. The Act contemplates various situations in which the question of a lender’s compliance with the Act’s disclosure requirements may arise in alawsuit—for example, a lender’s foreclosure action in which the borrower raises inadequate disclosure as anaffirmative defense. Section 1635(g) makes clear that acourt may not only award rescission and thereby relievethe borrower of his financial obligation to the lender, but may also grant any of the remedies available under §1640 (including statutory damages). It has no bearing upon whether and how borrower-rescission under §1635(a) may occur.
Finally, respondents invoke the common law. It is true that rescission traditionally required either that the rescinding party return what he received before a rescission could be effected (rescission at law), or else that a court affirmatively decree rescission (rescission in equity). 2 D. Dobbs, Law of Remedies §9.3(3), pp. 585–586 (2d ed. 1993). It is also true that the Act disclaims the common-law condition precedent to rescission at law that the borrower tender the proceeds received under the transaction. 15 U. S. C. §1635(b). But the negation of rescission-atlaw’s tender requirement hardly implies that the Act codifies rescission in equity. Nothing in our jurisprudence,and no tool of statutory interpretation, requires that a congressional Act must be construed as implementing itsclosest common-law analogue. Cf. Astoria Fed. Sav. & Loan Assn. v. Solimino, 501 U. S. 104, 108–109 (1991). The clear import of §1635(a) is that a borrower need onlyprovide written notice to a lender in order to exercise his right to rescind. To the extent §1635(b) alters the traditional process for unwinding such a unilaterally rescinded transaction, this is simply a case in which statutory lawmodifies common-law practice.
* * *
The Jesinoskis mailed respondents written notice oftheir intention to rescind within three years of their loan’s consummation. Because this is all that a borrower must do in order to exercise his right to rescind under the Act,the court below erred in dismissing the complaint. Accordingly, we reverse the judgment of the Eighth Circuit andremand the case for further proceedings consistent with this opinion.
It is so ordered.