Ninth Circuit: TILA Amendment Not Retroactive

TILA

On December 14, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s ruling that a 2009 amendment to TILA, which requires creditors to provide borrowers with written notice of the sale or transfer of mortgages, does not apply retroactively. Talaie v. Wells Fargo Bank, No. 13-56314 (9^th Cir. Dec. 14, 2015). In the putative class action case, plaintiffs alleged that one of the defendants transferred the deed of trust to the other defendant without providing notice to the borrowers, three years prior to the passage of the TILA amendment. Citing to Supreme Court precedent, the court reasoned that the presumption against retroactive legislation is “deeply rooted in our jurisprudence,” which can only be overcome by a clear and unambiguous Congressional intent. Id (citing Landgraf v. USI Film Prods., 511 U.S. 244, 265 (1994)). Applying Landgraf, the Ninth Circuit held that retroactive application here would (i) impair defendants’ rights at the time when they acted because they could do so without providing notice to the borrowers; (ii) increase the defendants’ “liability for past conduct”; and (iii) impose “new duties” on transactions already completed. The Ninth Circuit further concluded that Congress did not demonstrate a clear or unambiguous intention for the 2009 amendment to be given retroactive effect.