[JURIST] The US Court of Appeals for the Ninth Circuit [official website] on Friday ruled [opinion, PDF] that the federal Truth in Lending Act (TILA) [text] does not provide for statutory relief for a lender's failure to conspicuously disclose certain information about a loan to the borrower and to give the borrower certain information before offering the loan. The issue came before the court as an appeal from an earlier decision [text, PDF] by the Ninth Circuit Bankruptcy Appellate Panel [official website], which held that a debtor who had borrowed money through a subprime payday loan [FDIC backgrounder] could not later recover for the lender's failure to abide by conspicuous-disclosure [15 USC s. 1632(a) text] and information-sharing [15 USC 1638(b)(1) text] requirements. In affirming that decision, judges for the Court of Appeals wrote:

[A] consumer may not recover statutory damages under § 1640(a) for violations of § 1638(b)(1) and its corresponding regulations, 12 C.F.R § 226.17(b). As the Trustee has not enforced any liability under § 1640(a)(2), she is not entitled to attorneys’ fees and costs pursuant to § 1640(a)(3). …

A violation of § 1632(a) cannot form the basis for statutory damages, as it does not fall within the closed list of § 1638(a) subsections, violations of which can support an award of statutory damages.

The circuit court also affirmed the bankruptcy court's decision that the plaintiff had not shown that the debtor detrimentally relied on the loan information available to him, and so found that he was not entitled to actual damages.

In June, the Federal Bureau of Investigation (FBI) [official website] announced that more than 400 people had been indicted [press release; JURIST report] in connection with what has been termed the US "sub-prime mortgage collapse." Most of the indictments involved fraud related to individual mortgages, with the FBI focusing on lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes, which account for more than $1 billion in losses.