In Bengal Motor Co., Ltd. v. Cuello, — So.3d —-, 2013 WL 1980147 (Fla.App. 3 Dist. 2013), the Florida Court of Appeal found that a car dealer violated TILA by having the customer sign a RISC, but also 2 other documents stating that consummation was conditioned on the dealer securing financing.  The facts were as follows:

Cuello sought to buy a car from Maroone. She signed three documents at the dealership: 1) the Retail Buyer’s Order (“RBO”), which states that on a credit transaction the purchaser’s offer is not accepted until approved by the dealer and a bank or finance company, that Maroone retains title until all funds owed are paid, and if financing is not approved, Maroone can terminate the agreement at its option; 2) the Retail Sales Installment Contract (“RISC”), subject to TILA, and which contains financing terms to be submitted to the financing company for approval; and 3) the Bailment Agreement for Spot Delivery, which allowed Cuello to drive the vehicle off the dealer’s lot that same day. The Bailment Agreement states that the car remains dealer property pending financing approval and provides that, if financing is not approved, the purchaser may either sign a new RISC agreement with new finance terms or return the vehicle. The Bailment Agreement also states that it is attached to and forms part of the sales agreement. The RBO indirectly references the other documents.  ¶  After signing all three documents, the dealership allowed Cuello to leave with the car that day (a practice widely referred to as “spot delivery”). Subsequently, Cuello was not approved for financing at the terms recited in the RISC. The dealership notified her that she could sign a second RISC with different financing terms and a higher annual percentage rate, or she could return the vehicle to the dealership. Cuello did neither, and Maroone repossessed the vehicle.

Cuello sued that the RISC violated TILA because it compromised TILA’s finality rule.  The Court of Appeal agreed.

Although Maroone provided in the RISC all TILA disclosures required by federal law, the trial court’s concern was that the RISC did not refer to or mirror the conditional language of the RBO and Bailment Agreement, i.e., that absent from the RISC was language notifying the buyer that the consummation of the deal was contingent on the buyer being approved for third-party financing at the rates dis-closed in the RISC. Cuello argued, and the trial court agreed, that the conditional language of the other two documents compromised the “finality” of the RISC agreement pursuant to TILA, thus it was not a “final” statement of the deal under TILA and the consumer was thus not contractually obligated. Such a lack of finality under TILA, Cuello argued, is a per se viola-tion of the Florida FMVRSFA statute. We agree.  ¶  Regulation Z of TILA requires that the creditor disclose the identity of the creditor, the amount being financed, the annual percentage rate, the total sale price, and the total amount of payment. 15 U.S.C. § 1638(a); 12 C.F.R. § 226.18. These disclosures must be made “before credit is extended,” see 12 C.F.R. § 226.17(b); see also 15 U.S.C. § 1638(b)(1), a point known as “consummation.” “Consummation” refers to the time that a consumer becomes contractually obligated on a credit transaction. 12 C.F.R. § 226.2(a)(13). Regulation Z also provides that, when determining the point at which a consumer becomes contractually obligated to a credit agreement, state law should govern. See 12 C.F.R. § 226, Official Staff Commentary 2(a)(13). However, although state law is determinative of when a contractual relationship is created it has nothing whatsoever to do with how the transaction is to be characterized for TILA purposes; that question is governed by federal law. And the federal courts have held that TILA’s disclosure re-quirements become effective at the point in the transaction at which the buyer signs a credit agreement and becomes obligated to pay on it, regardless of the level of the creditor’s commitment.   Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060, 1066 (11th Cir.2004).. . . .¶ In Cuello’s case, the TILA disclosures in the RISC were made before credit was extended by the third-party lender, but the RISC did not contain any language notifying Cuello that the deal was contingent on securing financing. Thus, the federal cases on this narrow TILA issue indicate that the sale was con-summated when Cuello signed the RISC, not when a third party lender approved financing (or not) at the stated rates. The language of contingency set forth in the RBO and Bailment Agreement, not mirrored in the RISC, negated the TILA requirement of finality. We agree with the trial court’s conclusion that this results in a TILA violation, and, thus, a per se violation of FMVRSFA