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FTC Holder Rule --16 C.F.R. § 433.2(a)

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FTC Issues Commentary on the Holder Rule

by Scott J. Hyman |

As FY 2015 came to a close, the FTC asked for commentary on its Holder Rule for assignee liability.  Consumers and Industry responded in early 2016.  Three years in the making, the FTC finally responded, issuing its commentary today in the Federal Register, and it's first official commentary since the Rule was promulgated in 1975.  FTC Commentary on Holder Rule 5-2-19. … Read More

Cal. Supreme Court Denies Consumer’s Request for Review/Depublication of Lafferty Decision’s Holding that FTC Holder Rule Caps Attorneys’ Fees

by Jan T. Chilton |

In Lafferty v. Wells Fargo Bank, N.A., 2018 WL 3470748, at *2 (Cal.App. 3 Dist., 2018), the Court of Appeal held: We conclude the Laffertys are limited under the plain meaning of the Holder Rule to recovering no more than the $68,000 they paid under terms of the loan with Wells Fargo. Consistent with Lafferty I, we continue to “hold—to… Read More

Court of Appeal (Cal.) Says FTC Holder Rule Does Not Cap Fees, but Is Limited to Sums Spent to Litigate Case Against the Holder; Says Holder’s Tender under Section 2983.4 Provides No Defense

by Scott J. Hyman |

In Duran v. Quantum Auto Sales, Inc., 2017 WL 6334220, at *5 (Cal.App. 4 Dist., 2017), the Court of Appeal held in an unpublished decision held that the FTC Holder Rule does not limit attorneys' fees but the Plaintiff's recovery against the Holder is limited to those fees/costs that resulted from litigation of claims against it. We therefore turn to Veros's alternative… Read More

Court of Appeal (Cal.) Says Benson Tender Was in Bad Faith Because it Imposed Unreasonable Conditions on the Consumer; Says As to Holder Who Tendered Back the RISC, “Once a Holder, Always a Holder”

by Colin T. Murphy |

In Duran v. Quantum Auto Sales, Inc., 2017 WL 6333871, at *8 (Cal.App. 4 Dist., 2017), the Court of Appeal held in an unpublished decision that a car dealer's Benson-tender did not insulate the dealer from liability. In this case, Quantum's pre-litigation offer went far beyond a willingness to take corrective action as contemplated by the drafters of the CLRA. We… Read More

District Court (Ga.) Says FTC Holder Rule Does Not Provide Independent Basis For Claims, But Only Makes Holder “Subject to” Claims That Can Be Lodged Against The Seller

by Scott J. Hyman |

In Hemmings v. Camping Time RV Centers, LLC, 2017 WL 4552896, at *8 (N.D.Ga., 2017), Judge Thrash dismissed independent Holder Rule claims against the holder of an RISC for an RV because the FTC Holder Rule only subjects the holder to claims that can brought against the seller. Next, Bank of America argues that the Plaintiff's FTC Holder Rule claim should be… Read More

Court of Appeal (Cal.) Finds in Unpublished Decision that Holder Rule Does Not Cap Attorneys’ Fees and Costs

by Scott J. Hyman |

In Medina v. South Coast Car Company, 2017 WL 4128076, at *8 (Cal.App. 4 Dist., 2017), the Court of Appeal held that a settlement agreement entitling Plaintiff to attorneys' fees was not capped by the FTC Holder Rule. In light of the Settlement and section 5, which, the parties agreed, made Medina the “prevailing party,” it is clear from the plain… Read More

Court of Appeal (Cal.) Finds that Holder’s Tender of “Correction” Money to the Court under CC 2983.4 Does Not Require “Admission” of Liability for Holder to Be the Prevailing Party

by Scott J. Hyman |

In Tun v. Wells Fargo Bank, the California Court of Appeal found that the Trial Court did not err in finding, pre-trial in limine, that an Automobile RISC Holder's tender to the Court of money under Civil Code 2983.4 did not constitute an "admission of liability".  When the Trial Court, despite a defense verdict in favor of the Dealer and the… Read More

District Court (Va.) Says Car Dealer May Violate TILA by Inflating Vehicle’s Purchase Price If, Also, Cash Price is Higher than Financed Price; State UDAP Claims Can Be Asserted Against Holder under the FTC Holder Rule

by Scott J. Hyman |

In Harold v. TMC Enterprises, LLC, 2016 WL 6069023 (W.D. Va. 2016), Judge Moon held that a car buyer adequately pleaded a TILA violation due to an inflated purchase price of the vehicle where the buyer also alleged that the finance price of a vehicle is higher than its cash price. Plaintiff asserts that Defendants violated the TILA by failing… Read More

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