In Weintraub v Quicken Loans, Inc, No. 08-2373, 2010 U.S. App. LEXIS 2502 (4th Cir. Feb. 5, 2010), the Fourth Circuit determined what constitutes a consummated credit transaction giving rise to the right to rescind under the federal Truth in Lending Act. Before closing a refi loan on their home, the Weintraubs attempted to exercise their TILA right to rescind, and demanded a full refund of their $500 deposit. Quicken refunded $129 after deducting for the credit report and appraisal.
The district court granted summary judgment to Quicken, holding that the statutory right to rescind is available only to rescind a consummated credit transaction. Id. at *8-9. The Fourth Circuit affirmed, concluding that a consummated credit transaction in this context results in binding loan obligations and the creation of a security interest in the consumer’s property. Id. at *14, 16-17. The Fourth Circuit concluded that because the Weintraubs chose not to take the loan before closing, they were not entitled to rescission under TILA. Id. at *18.