Truth in Lending Federal Lawsuits Continue to Decline

The latest available data from the federal courts show that federal lawsuits filed under the truth in lending laws are continuing to decline. During May 2013 the government reported only 16 new truth in lending civil filings. This followed only 26 such suits filed in April and 14 suits begun during March, according to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC).

Truth in lending lawsuits have fallen 89 percent, down from the peak of 152 reached four years ago in May 2009, after the collapse of the housing market. At that time, such lawsuits soared, particularly those brought against banks and mortgage companies under the truth in lending provisions of Title 15, Section 1601.

The current pace of litigation, however, is also far below the levels that prevailed before the housing collapse. For example, In May 2007 there were 58 such suits, and in May 2008 there were 57 truth in lending cases filed in federal court.

The long term trend in truth in lending civil filings going back five years is shown more clearly in Figure 1. The vertical bars in Figure 1 represent the number of truth in lending civil filings recorded each month. The superimposed line on the bars plots the six-month moving average so that natural fluctuations are smoothed out.

Figure 1. Truth in Lending Civil Filings over the last 5 years

During the first eight months of fiscal year 2013 (October 2012 - May 2013), New Mexico led the nation with the largest number of truth in lending suits (28) filed in federal court. Many of these were filed against the Big "E" Incorporated and Native American Loan Company, Inc. The Central District in California (Los Angeles) had the second largest volume (25), followed by the Southern District of Florida (Miami) with 22 cases. The Northern District of Georgia (Atlanta) and the Northern District of Indiana (South Bend) were in fourth and fifth place, respectively.

Each month, TRAC offers a free report focused on one area of civil litigation in the U.S. district courts. In addition, subscribers to the TRACFed data service can generate custom reports by district, office, nature of suit or federal jurisdiction via the TRAC Data Interpreter.

Report Date: June 24, 2013