Will the FTC’s Advisory Opinion on the Holder
in Due Course Rule Change the Treatment
of Claims Against Assignees?
By John L. Ropiequet1
In May 2012, the Federal Trade Commission (FTC)
issued a formal advisory opinion (Advisory Opinion)2
which stated that consumers who seek affirmative relief
against assignees of their contracts under the Holder in
Due Course Rule (Holder Rule)3 are not limited to
claims that the goods or services they purchased are so
worthless that the transaction can be rescinded. The
Advisory Opinion was issued in response to a letter
from consumer advocacy groups which asserted that
numerous courts had misinterpreted the Holder Rule
over the years by limiting its application to cases in
which the consumer was justified in seeking rescission
of the contract.
The Holder Rule was promulgated by the FTC in
1975.4 The Rule provides that persons who “[t]ake
or receive a consumer credit contract” in which the
following language is missing are guilty of an unfair
practice that violates Section 5 of the Federal Trade
Commission Act:5
NOTICE
ANY HOLDER OF THIS CONSUMER
CREDIT CONTRACT IS SUBJECT TO
ALL CLAIMS AND DEFENSES WHICH
THE DEBTOR COULD ASSERT AGAINST
THE SELLER OF GOODS OR SERVICES
OBTAINED
PURSUANT
HERETO
OR WITH THE PROCEEDS HEREOF.
RECOVERY HEREUNDER BY THE
DEBTOR SHALL NOT EXCEED AMOUNTS
PAID BY THE DEBTOR HEREUNDER.6
John L. Ropiequet is counsel to Arnstein & Lehr LLP, Chicago,
where he has practiced for over thirty years and is cochair of its
Consumer Finance Group. He may be contacted at
(312) 876-7814 or jlropiequet@arnstein.com.
16 • Banking & Financial Services Policy Report
The FTC issued an explanatory Statement of Basis
and Purpose (SBP) along with the Holder Rule. The
following statement was included in the SBP:
This rule is directed at the preservation of consumer claims and defenses [which] means that
a consumer can (1) defend a creditor’s suit for
payment of an obligation by raising a valid claim
against the seller as a set off, and (2) maintain
an affirmative action against a creditor who has
received payments for return of monies paid on
account. The latter alternative will only be available
when the seller’s breach is so substantial that a court is
persuaded that rescission and restitution are justified.
The most typical example is such a case would
involve non-delivery, or delivery was scheduled
after the date payments to a creditor commenced.7
If the Holder Rule language is read literally, it would
seemingly mean that any type of claim that a purchaser
under the retail installment contract might have against
the seller could also be brought against any person to
whom the contract is assigned because the language of
the contract provides for such liability. Court rulings,
which have relied on the above language of the SBP
have, however, significantly restricted assignee liability. This caused one of the same consumer advocacy
groups that influenced the FTC to issue the Advisory
Opinion to take issue with these interpretations several years earlier. In response to the group’s concerns,
the FTC’s staff issued an opinion letter in 1999 (Staff
Letter),8 which took issue with those decisions.
The Advisory Opinion stated that the “plain language” of the Holder Rule, making every holder of
a consumer credit contract “subject to all claims and
defenses which the debtor could assert against the seller
of goods or services,” does not limit the consumer
to use of the Holder Rule as a defense to a creditor’s
claims for the contract balance.9 The Opinion stated
Volume 32 • Number 9 • September 2013
that the Holder Rule also permits the consumers to
make affirmative claims for relief even if “rescission
is not warranted.”10 The Opinion further noted that
assignee liability for affirmative claims is limited to
the amounts paid on the contract prior to suit by the
consumer.11
Assignee Claims under the Truth
in Lending Act and the Holder Rule
After a number of early cases under the Truth in
Lending Act (TILA)12 failed to distinguish between
the original creditors on credit sale contracts and their
assignees, TILA was amended in 1980 to clarify that
contract assignees are not to be treated the same as the
creditors who first extend credit to consumers. The
amended definition of “creditor” was
The term “creditor” refers only to a person who
both (1) regularly extends, whether in connection with loans, sales of property or services, or
otherwise, consumer credit which is payable by
agreement in more than four installments and for
which the payment of a finance charge is or may
be required, and (2) is the person to whom the debt
arising from the consumer credit transaction is initially
payable on the face of the evidence of indebtedness or,
if there is no such evidence of indebtedness, by
agreement … .13
To go with this new definition, a limitation on the
liability of contract assignees was also added to TILA in
Section 1641(a):
Except as otherwise specifically provided in this
subchapter, any civil action for a violation of this
subchapter or proceeding under section 1607 of
this title which may be brought against a creditor may be maintained against any assignee of such
creditor only if the violation for which such action or
proceeding is brought is apparent on the face of the disclosure statement except where the assignment was
involuntary … .14
The difference between a “creditor” and an
“assignee” in connection with the Holder Rule became
the subject of definitive court rulings in 1998.15 In one
case, Taylor v. Quality Hyundai, Inc.,16 the Seventh
Circuit held that the Holder Rule language (Holder
Notice) could not be allowed to override the limitation
Volume 32 • Number 9 • September 2013
on assignee liability enacted by Congress in the TILA
amendments:
The plaintiffs initially argued that the TILA actually has nothing to do with the assignee’s liability
in these cases, because they are bound under
the terms of the contracts they accepted, wholly
apart from the statute … . In our view, however,
this misconstrues the effect of the Holder Notice
insofar as it covers TILA-based claims.
*
*
*
The Holder Notice, even though contained
within the contract, was not the subject of bargaining between the parties and indeed could not
have been. It is part of the contract by force of
law, and it must be read in light of other laws that
modify its reach. [citation omitted] We therefore
reject the plaintiffs’ contract-based effort to sidestep [section] 1641(a).17
This holding was confirmed by the Seventh Circuit
in Walker v. Wallace Auto Sales, Inc.18 The Walker court
held that “the FTC’s Holder Notice in a retail installment contract did not trump the clear command of
section 131 [of TILA] that subsequent assignees can
be held liable under TILA only when the violation
is apparent on the face of the disclosure statement.”19
These rulings were followed by several others in short
order.20
The Seventh Circuit did not find that the limitation on assignee liability in TILA simply nullified the
Holder Rule language, however. Relying on earlier
cases that dealt with the issue, the court found that the
Holder Rule would be given effect in circumstances in
which the consumer is entitled to rescind the contract,
allowing the contract to be rescinded against both the
original creditor and any assignee of the contract if
rescission were justified.21 The court cited a district
court opinion in Mount v. LaSalle Bank Lakeview,22
which held that the Holder Rule permits a consumer
to sue a creditor to obtain a refund of all money that
has been paid on a contract, limited to cases in which
“the seller’s breach was so substantial that rescission
and restitution were justified under equitable state law
principles.”23 Mount and the cases it relied on, particularly the decision of the Massachusetts Supreme Judicial
Banking & Financial Services Policy Report • 17
Court in Ford Motor Credit Co. v. Morgan,24 cited and
relied on the comments in the SBP quoted above.25
Following the issuance of the Taylor and Walker
decisions, and other cases following them,26 only one
federal case has dissented from the proposition that
assignee liability under the Holder Rule is limited to
situations in which the consumer is entitled to rescind.
In that case, Lozada v. Dale Baker Oldsmobile, Inc.,27 the
court conceded that Taylor would not permit a TILA
claim to be brought against an assignee absent rescission, but it held that the plaintiff could still, under a
state uniform deceptive acts and practices (UDAP) statute, bring claims that were based on a TILA violation
against an assignee pursuant to the Holder Rule.28 This
ruling was not appealed, but Lozada was subsequently
overruled by the Sixth Circuit on other grounds.29
State Law Holder Rule Claims Against
Assignees
Prior to the Taylor and Walker decisions, several
courts applied the Holder Rule to hold assignees of
consumer credit contracts liable for state law claims
against the original creditors. One case which is frequently cited by the plaintiff’s bar is Eachen v. Scott
Housing Systems, Inc.30 The plaintiff mobile home buyers in Eachen were able to sue both the manufacturer
of their mobile home and the finance company which
financed their purchase when it bought their contract
from a mobile home dealer for breach of warranty.31
Several similar rulings which applied the Holder Rule
literally were made in other cases prior to 1998.32
Other cases took a different approach by examining
both the Holder Rule and the SBP, finding that the
FTC did not intend that assignees could be held liable
for any claim against the original creditor. The leading
case was the Morgan decision. In that case, the court
dealt with claims which car buyers brought against
Ford Motor Credit as the assignee of their retail installment contract with the dealer who sold them the car.
They asserted that the finance company was liable for
their claims of fraud, deceptive practices, and breach of
warranty against the dealer.33
The Morgan court found that although the Holder
Rule was intended to preserve a consumer’s defenses
to further payment on a contract in cases in which the
issuer of the contract is guilty of wrongdoing, the FTC
18 • Banking & Financial Services Policy Report
“anticipated that in addition to non-payment, affirmative recovery, that is, a judgment for damages against
the assignee-creditor, would be available in limited circumstances.”34 It found that pursuant to the language
in the SBP, those circumstances were limited to cases
in which “a seller’s breach is so substantial that a court
is persuaded that rescission and restitution are justified.”35 The Morgan court further noted that the FTC
reemphasized this in the SBP by stating that
Consumers will not be in a position to obtain an
affirmative recovery from a creditor, unless they
have actually commenced payments and received
little or nothing of value from the seller. In a case
of non-delivery, total failure of performance, or
the like, we believe the consumer is entitled to a
refund of monies paid on the account.36
The court found that the plaintiffs’ claim was not
preserved by the Holder Rule because they made no
claim of entitlement to rescission and restitution.37
The 1999 Staff Letter stated that Morgan and the
cases which followed it38 erred by “interpreting the
provision to allow a consumer an affirmative recovery
only if he or she is entitled to rescission or similar relief
under state law, [and] are inconsistent with our position.”39 It also stated that
We believe that the point made in these SBP
excerpts is simply that affirmative recoveries will
be rare because they occur only if … the consumer
has a claim large enough to more than extinguish
the balance due. If the Commission had meant to
limit the recovery to claims subject to “rescission”
or similar remedy, it would have said so in the text
of the Rule and drafted the contractual provision
accordingly.40
The Staff Letter concluded with a disclaimer that
“[t]he views set forth in this informal staff opinion letter are not binding on the Commission.”41 The Letter
made no mention of then-recent decisions by the
Seventh Circuit in Taylor and Walker with respect to
application of the Holder Rule to TILA claims.
The Staff Letter was either ignored in subsequent
case decisions or was given little weight. In the leading decision of Jackson v. South Holland Dodge, Inc.,42
Volume 32 • Number 9 • September 2013
which came down in 2001, two years after the Staff
Letter was issued, the Illinois Supreme Court dealt with
a case in which the plaintiff brought an action under
the Illinois Consumer Fraud Act (ICFA),43 a UDAP
statute, against the finance company which took assignment of his retail installment contract from the dealer.
The ICFA claims were based on the dealer’s failures to
make credit disclosures which were required by TILA
and other allegedly deceptive practices.44
The Jackson court ruled that the limitation on
assignee liability in TILA, Section 1641(a), could not
be circumvented by making a claim under the ICFA
for consumer fraud because allowing such a claim
“would frustrate the overarching reasons put forth by
Congress in enacting the assignee exemption.”45 The
court further rejected the argument that the Holder
Rule language in the contract meant that the assignee
assumed liability for wrongdoing by the dealer as a
matter of state contract law, following Taylor, because
the contract language was there by virtue of the FTC’s
regulation instead of being part of the parties’ bargain,
and because the 1975 Holder Rule was trumped by
the 1980 amendments to TILA.46 The court also noted
the limitation of claims against assignees to situations in
which “rescission and restitution are justified” in the
SBP, which was the “official FTC commentary on the
subject.”47 The court found that the Staff Letter was
an attempt to “contradict the official commentary” in
the SBP, but since it was an “informal staff opinion
letter, not binding on the FTC,” it was not “persuasive
authority to override the official commentary.”48
Most cases which have come down after Jackson have
reached the same result. One which reached a different
result, Scott v. Mayflower Home Improvement Corp.,49 which
found that claims under the New Jersey UDAP statute
were preserved by the Holder Rule and were not subject
to the limitation on assignee liability in Section 1641(a),50
was subsequently overruled in Psensky v. American Honda
Finance Corp.,51 which followed Jackson.52
The Advisory Opinion
The consumer advocates’ letter to which the
Advisory Opinion responded listed six cases in which
the courts had imposed a rescission requirement to
limit the scope of the Holder Rule.53 The Opinion
seemed to consider these cases to be rogue decisions,
and it took the position that the “plain language” of
Volume 32 • Number 9 • September 2013
the Holder Rule does not limit a consumer to mere
defensive use of the Holder Rule against claims for the
balance owed on the contract.54 Instead, the Opinion
stated that the contract language, which the Holder
Rule requires in consumer credit contracts, “protects
consumers who enter into credit contracts with a seller
of goods or services by preserving their right to assert
claims or defenses against any holder of the contract,
even if the original seller subsequently assigns the
contract to a third-party creditor,” limited only by the
provision “that a consumer’s recovery ‘shall not exceed
amounts paid’ by the consumer under the contract.”55
The Advisory Opinion stated that Morgan was
wrongly decided because “the Rule is unambiguous,
and its plain language should be applied” since no
rescission limitation was made a part of the Holder
Rule, and if the FTC had intended there to be such
a limitation, “it would have said so in the text of the
Rule and drafted the contractual provision accordingly.”56 The Opinion noted that when the FTC
promulgated the Holder Rule, it rejected suggestions
from the industry that the Rule be limited to matters
of defense or setoff, and that “to give full effect to the
Commission’s original intent to shift seller misconduct
costs away from consumers,” consumers must be able
to recover all of the funds they have paid “even if
rescission is not warranted.”57
Rather than attempt to amend or withdraw the
statements in the SBP that the Morgan court and other
courts have relied on, the Advisory Opinion simply
stated that those were “two isolated comments in the
SBP” which had been misinterpreted.58 In order to
place the comments “in the context of the entire SBP,”
the FTC approved how the Lozada court handled the
SBP comments:
[W]hen read in context of the entire SBP, including the SBP language highlighted above, two SBP
comments cited by Morgan and its progeny do
not undermine the plain language of the Rule. As
explained by one court that rejected the Morgan
approach, “[w]here one or more parts of the
[SBP] fully comport with the text of the Rule
while another, read in a particular way, is at odds
with the plain language of the regulation, there
exists no basis for giving controlling weight to an
interpretation of the rule itself.” These statements
Banking & Financial Services Policy Report • 19
should be read as practical observations or predictions, instead of as contradicting the Rule.59
law claims are based on alleged TILA violations for the
reasons stated in Jackson.66
The Advisory Opinion found that this interpretation
was appropriate because most of the time, if there is a
“significant consumer injury” that does not warrant
rescission, “the consumer is likely to find out about
the injury shortly after the transaction is consummated, and thus is likely to stop payments before the
claim amount is larger than the balance due.”60 The
Advisory Opinion concluded that the SBP comments
“do not conflict with the rest of the SBP and the plain
language of the Rule” because “affirmative recoveries
will be rare in cases where rescission is not justified
because such recoveries occur only if the consumer’s
claim is larger than what the consumer still owes on
the loan.”61
The result may be different if the consumer brings
a state law claim that is not based on a TILA violation, for example, a UDAP claim for fraud by an
auto dealer rather than improper credit disclosures. In
such cases, in jurisdictions where the reported decisions have followed Morgan, the plaintiff will have to
persuade the courts that the Advisory Opinion merits
a new look at the question and a change in the law.
The Advisory Opinion has caused at least one court
to decline to follow cases in other jurisdictions which
have imposed a rescission requirement where there was
no previous case law in the state which had followed
Morgan.67 Where there is decisional law that imposes
such a limitation on the Holder Rule, it may take some
time before the courts accept the Advisory Opinion as
a proper basis for overruling established case law that
imposes a rescindability requirement on claims against
assignees.
Conclusion
The plaintiff’s bar has expressed a readiness to use
the Holder Rule as a basis for making claims against
both original creditors and assignees.62 The Advisory
Opinion strengthens their case, particularly in cases in
which the courts may have found that the Staff Letter
should be given little weight because it was not an
official pronouncement of the FTC.63 The Advisory
Opinion, which was approved by a unanimous vote
by the FTC,64 demonstrates that the full Commission,
not just its staff, stands behind the proposition that
affirmative relief under the Holder Rule is not limited
to situations in which rescission and restitution are
justified.
Although the Advisory Opinion took on the 1989
Morgan decision directly, it was totally silent on the 1998
Taylor and Walker decisions which held that the congressional amendments to TILA in 1980 trump the
FTC’s Holder Rule with respect to TILA-based claims.
Nor did it address the 2001 Jackson decision or cases
following Jackson which held that the TILA limitation
on assignee liability cannot be circumvented by using
an alleged TILA violation by the original creditor as the
basis for a UDAP claim against an assignee.
The Advisory Opinion is unlikely to sway courts
in cases in which TILA disclosure violations form the
basis for claims, given the uniform position taken by
numerous federal courts which have followed Taylor
and Walker.65 The result will likely be the same if state
20 • Banking & Financial Services Policy Report
Notes
1. The author represented defendants in the following cases mentioned in this article: Walker v. Wallace Auto Sales, Inc., 155 F.3d
927 (7th Cir. 1998); Balderos v. City Chevrolet, Buick & Geo, Inc.,
214 F.3d 849, 853 (7th Cir. 2000); Irby-Greene v. M.O.R., Inc., 79
F. Supp. 2d 630, 633-34 (E.D.Va. 2000); Knapp v. AmeriCredit Fin.
Serv., Inc., 245 F. Supp. 2d 841, 848 (S.D.W.Va. 2003).
2. Letter from Donald S. Clark, Secretary, FTC, to Jonathan
Sheldon, et al., National Consumer Law Center (May 3, 2012)
[hereinafter Advisory Opinion], available at http://ftc.gov/os/2
012/05/120510advisoryopinionholderrule.pdf. See Press Release,
Fed. Trade Comm’n, FTC Opinion Letter Affirms Consumers’
Rights under the Holder Rule (May 10, 2012), available at
http://ftc.gov/opa/2012/05/holderrule.shtm.
3. 16 C.F.R. pt.433 (2012).
4. 40 Fed. Reg. 53506 (Nov. 18, 1975).
5. 15 U.S.C. § 45 (2006).
6. 16 C.F.R. § 433.2(a) (2012).
7. 40 Fed. Reg. at 53524 (emphasis supplied).
8. Letter from David Medine, Associate Director, Division of
Financial Practices, FTC, to Jonathan Sheldon, National
Consumer Law Center (Sept. 25, 1999) [hereinafter Staff Letter],
available at http://ftc.gov/os/2012/05/120510staffletter1999.pdf.
9. Advisory Opinion, supra n.2, at 2, 4.
10. Id. at 4.
11. Id.
12. Pub. L. No. 90-321, 82 Stat. 146 (1968) (codified as amended at
15 U.S.C. §§ 1601–1667f (2006 & Supp. V 2011)).
Volume 32 • Number 9 • September 2013
13. 15 U.S.C. § 1602(f) (2006) (emphasis supplied). Regulation Z
was similarly amended. 12 C.F.R. § 1026.2(a)(17) (2012).
14. 15 U.S.C. § 1641(a) (2006) (emphasis supplied).
15. See generally Mark A. Dapier, Eugene J. Kelley, Jr., John L.
Ropiequet & Christopher S. Naveja, “Assignee Liability Under
the TILA: Is the Conduit Theory Really Dead?” 54 Consumer
Fin. L.Q. Rep. 242 (2000), reprinted in Ralph J. Rohner & Fred
H. Miller, Truth in Lending ¶ 12.06[1] (2d ed. 2000 & Supp. 2009).
Co. v. Stamatiou, 384 So. 2d 388 (La. 1980); Thomas v. Ford Motor
Credit Co., 48 Md. App. 617, 429 A.2d 277 (1981); Hardeman v.
Wheels, Inc., 56 Ohio App. 3d 142, 565 N.E.2d 849 (1988).
33. Morgan, 404 Mass. at 539-540.
34. Id. at 541-542 & n.2.
35. Id. (citing SBP, 40 Fed. Reg. at 53524).
36. Id. at 542 (citing SBP, 40 Fed. Reg. at 53527) (emphasis supplied).
16. 150 F.3d 689 (7th Cir. 1998), cert. denied, 525 U.S. 1141 (1999).
37. Id. at 543.
17. Id. at 693.
38. See Staff Letter, supra n.8, at 2, n.3 (citing Mount v. LaSalle
Bank Lakeview, 926 F. Supp. 759, 763-764 (N.D. Ill. 1996); In
re Hillsborough Holdings Corp., 146 B.R. 1015, 1021 (Bankr.
M.D. Fla. 1992); Felde v. Chrysler Credit Corp., 219 Ill. App. 3d
530, 580 N.E.2d 191, 197 (1991); Mardis v. Ford Motor Credit
Co., 642 So. 2d 701, 703 (Ala. 1994)).
18. 155 F.3d 927 (7th Cir. 1998).
19. Id. at 935 (citing 15 U.S.C. § 1641(a)). This holding was reaffirmed in Balderos v. City Chevrolet, Buick & Geo, Inc., 214
F.3d 849, 853 (7th Cir. 2000).
20. See Ramadan v. Chase Manhattan, 229 F.3d 194, 198 (3d Cir.
2000); Green v. Levis Motors, Inc., 179 F.3d 286, 295 (5th
Cir.), cert denied, 520 U.S. 1020 (1999); Ellis v. Gen. Motors
Acceptance Corp., 160 F.3d 703, 709 (11th Cir. 1998); IrbyGreene v. M.O.R., Inc., 79 F. Supp. 2d 630, 633-34 (E.D. Va.
2000); Knapp v. AmeriCredit Fin. Serv., Inc., 245 F. Supp. 2d
841, 848 (S.D.W. Va. 2003); Van Vels v. Premier Athletic Center
of Plainfield, Inc., 1998 U.S. Dist. LEXIS 10993 (W.D. Mich.
1998); Coleman v. Gen. Motors Acceptance Corp., 196 F.R.D.
315 (N.D. Tenn. 2000).
42. 197 Ill. 2d 39, 755 N.E.2d 462 (2001). See generally Assignee
Liability, supra n.28.
21. Walker, 150 F.3d at 693.
46. Id. at 53-54 (citing Taylor, 150 F.3d at 693).
22. 926 F. Supp. 759 (N.D. Ill. 1996).
47. Id. at 54-55 (citing SBP, 40 Fed. Reg. at 53524).
23. Id. at 763-764 (citing Felde v. Chrysler Credit Corp., 219 Ill.
App. 3d 530, 536, 580 N.E.2d 191, 196 (1991); Ford Motor
Credit Co. v. Morgan, 404 Mass. 537, 541-542, 536 N.E.2d 587,
589-590 (1989)).
49. 363 N.J. Super. 145, 831 A.2d 564 (2001).
24. 404 Mass. 537, 541-542, 536 N.E.2d 587, 589-590 (1989).
25. Mount, 926 F. Supp. at 763-764.
39. Id. at 1-2.
40. Id. at 2.
41. Id.
43. 815 ILCS 505/2 (2010).
44. 197 Ill. 2d at 41-42.
45. Id. at 49-50.
48. Id. at 55.
50. 363 N.J. Super. at 155-56, 831 A.2d at 570 (following Lozada
and rejecting Taylor line of cases).
51. 378 N.J. Super. 221, 875 A.2d 290 (2005).
26. See supra ns.19-20.
52. Id. at 231, 875 A.2d at 296 (citing Jackson, 755 N.E.2d at 469).
27. 91 F. Supp. 2d 1087 (W.D. Mich. 2000).
53. See Advisory Opinion, supra n.2, at 1 n.3 (citing Rollins v.
Drive-1 of Norfolk, Inc., No. 2:06-cv-375, 2007 WL 602089
(E.D. Va. Feb. 21, 2007); Phillips v. Lithia Motors, Inc., No.
03-cv-3109-HO, 2006 WL 1113608 (D. Ore. Apr. 27, 2006);
Costa v. Mauro Chevrolet, Inc., 390 F. Supp. 2d 720 (N.D. Ill.
2005); Comer v. Person Auto Sales, Inc., 368 F. Supp. 2d 478
(M.D.N.C. 2005); Herrara v. North & Kimball Group, Inc.,
No. 01-cv-7349, 2002 U.S. Dist. LEXIS 2640 (N.D. Ill. Feb. 15,
2002); Bellik v. Bank of Am., 373 Ill. App. 3d 1059, 869 N.E.2d
1179 (2007)). Like the Jackson court, the Comer court was cited
“as pointedly rejecting the FTC staff opinion letter … [as] ‘not
binding on the Commission.’” Id.
28. Id. at 1098 n.2 (citing Pawlikowski v. Toyota Motor Credit
Corp., 309 Ill. App. 3d 550, 722 N.E.2d 767, 773 (1999)).
Pawlikowski was subsequently overruled in Jackson v. South
Holland Dodge, Inc., 197 Ill. 2d 39, 755 N.E.2d 462 (2001).
See generally Eugene J. Kelley, Jr. & John L. Ropiequet, Assignee
Liability Under State Law after Jackson v. South Holland Dodge,
56 Consumer Fin. L.Q. Rep. 16 (2002), reprinted in Ralph
J. Rohner & Fred H. Miller, Truth in Lending ¶ 12.06[5] (2d ed.
2000 & Supp. 2009) [hereinafter Assignee Liability].
29. See Baker v. Sunny Chevrolet, Inc., 349 F.3d 862 (6th Cir. 2003).
See also Dykstra v. Wayland Ford, Inc., 134 Fed. App’x 911
(6th Cir. 2005).
30. 630 F. Supp. 162 (M.D. Ala. 1986).
31. Id. at 164-165.
32. See, e.g., Perry v. Household Retail Serv., Inc., 953 F. Supp. 1370,
1375-1376 (M.D. Ala. 1996); Mayberry v. Said, 911 F. Supp.
1393, 1402-1403 (D. Kan. 1995); Cox v. First Nat’l Bank of
Cincinnati, 633 F. Supp. 236, 239 (S.D. Ohio 1986); Bendix Home
Sys., Inc., 644 P.2d 843 (Alaska 1982); Jefferson Bank & Trust
Volume 32 • Number 9 • September 2013
54. Advisory Opinion, supra n.2, at 1 & n.2.
55. Id. at 2.
56. Id. at 3.
57. Id. at 3-4.
58. Id. at 4.
59. Id. at 4-5 (citing Lozada, 91 F. Supp. 2d at 1096). The Advisory
Opinion did not note that Lozada had been overruled and likewise did not note that the Scott decision in New Jersey, which
Banking & Financial Services Policy Report • 21
it cited as one of the “many cases” which followed the interpretation of the Holder Rule in the Staff Letter, had also been
overruled. See id. at 3 & n.7. Two other cases it cited, Simpson
v. Anthony Auto Sales, Inc., 32 F. Supp. 2d 405, 409 n.10 (W.D.
La. 1998), and Riggs v. Anthony Auto Sales, 32 F. Supp. 2d 411,
416 n.13 (W.D. La. 1998), were decided about three weeks after
the Taylor decision came down and did not mention or consider
the Taylor decision.
60. Advisory Opinion, supra n.2, at 5.
cases which interpret the Holder Rule as requiring entitlement
to rescission for claims for affirmative relief represent the “minority view.” See id. at 363-364. See generally Nat’l Consumer Law
Center, Unfair and Deceptive Acts and Practices § 6.6 (6th ed. 2004).
63. See, e.g., Jackson, 197 Ill. 2d at 55.
64. See Press Release, supra n.2.
65. See supra ns.19-20.
61. Id.
66. See supra text at ns.42-48. See generally Assignee Liability, supra
n.28, at 22.
62. See, e.g., David A. Szwak, “The FTC ‘Holder’ Rule,” 60 Consumer
Fin. L.Q. Rep. 361 (2006). The author takes the position that the
67. Lafferty v. Wells Fargo Bank, 213 Cal. App. 4th 545, 559-563,
153 Cal. Rptr. 3d 240, 250-253 (2013).
22 • Banking & Financial Services Policy Report
Volume 32 • Number 9 • September 2013