Sanders v. Mountain America Federal Credit Union

O’BRIEN, Circuit Judge.

For certain mortgage loans covered by the Truth-in-Lending Act (TILA), a timely written notice of rescission triggers the creditors duty to release its security interest and refund any finance charges. Once the creditor satisfies this duty, the borrower must return the loan proceeds. Although we have not spoken authoritatively on the issue, several circuits allow district courts to equitably condition the creditor’s duty on the borrower’s ability to repay the loan proceeds.

In this case, however, the district court went further by concluding a borrower seeking to compel…