369 F.Supp. 1121 (S.D.Ill. 1974), RI-CIV-73-22, Johnson v. Associates Finance, Inc.

Docket Nº:RI-CIV-73-22.
Citation:369 F.Supp. 1121
Party Name:Judith JOHNSON, Plaintiff, v. ASSOCIATES FINANCE, INC., Defendant.
Case Date:February 06, 1974
Court:United States District Courts, 7th Circuit, Southern District of Illinois

Page 1121

369 F.Supp. 1121 (S.D.Ill. 1974)

Judith JOHNSON, Plaintiff,



No. RI-CIV-73-22.

United States District Court, S.D. Illinois, Northern Division.

Feb. 6, 1974

Tom M. Lytton, East Moline, Ill., for plaintiff.

John Donald O'Shea, Moline, Ill., for defendant.


ROBERT D. MORGAN, Chief Judge.

By this action plaintiff seeks relief for alleged violations by the defendant of the Federal Truth in Lending Act, 15 U.S.C. §§ 1601-1665, Title I of the Consumer Protection Act, and the regulations promulgated thereunder, FRB Regulation Z, 12 CFR § 226.1 et seq. Jurisdiction is provided by 15 U.S.C. § 1640(e).

Specifically, the issues presented herein call for interpretation of § 1639 of Title 15, and certain Federal Reserve Board regulations governing consumer

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loans not under open end credit plans. The instant case involves one such loan made by the defendant to the plaintiff, who now contends that the disclosure requirements of the law were not met in three regards. The matter is now before the court on plaintiff's motion for summary judgment, which, for the reasons set forth below, must be granted. The court is appreciative of scholarly briefs which have been furnished by both sides.

The introductory provision of the Federal Truth in Lending Act clearly and concisely states that it is the purpose of the statute:

"*** to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uniformed use of credit." 15 U.S.C. § 1601.

Congress recognized that, to the borrower, the consumer credit field was a frequently incomprehensible jungle, and by the passage of this Act it hoped to alleviate that situation. The remedial objectives of this statute can, however, only be achieved through a rigorous application of the requirements of the law. Any interpretation of the Act and the regulations implementing it should be made with the full realization that "meaningful disclosure" is the byword of the statute.

The first of the plaintiff's three contentions is that the Loan Disclosure Statement prepared in connection with the subject loan is inadequate because it fails to disclose a "description of each amount included" in the finance charge, as required by Section 226.8(d)(3) of Regulation Z. 1 The "finance charge" is stated as such in a box at the top of the defendant's Disclosure Statement and, although it is nowhere stated, the parties now agree that it actually includes interest only here, and no other additional fee or charge. Associates insists that because the finance charge consists of...

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