No TILA Damage Increase for Car Buyer

A car buyer suing a used car dealership for allegedly selling him a Honda Accord under an unsigned retail installment sales contract that charged 28 percent interest, is entitled to a default judgment, but he cannot collect $2,000 in statutory damages under the Truth in Lending Act; the Lynchburg U.S. District Court says the Dodd-Frank amendment to the TILA doubling the amount of the statutory damages did not become effective July 22, 2010.

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which increased the ceiling in TILA’s civil liability provision from $1,000 to $2,000. Plaintiff seeks $2,000 in statutory damages for defendant’s TILA violations. However, plaintiff’s entitlement to this amount depends on what date the increase is considered to have taken effect. Plaintiff asserts the increase took effect July 22, 2010, before his purchase of the 1992 Honda Accord in September 2010.

This issue – deciphering the date on which the increase in TILA’s statutory damages cap is effective – appears to be one of first impression.

Except as otherwise specifically provided, the effective date for the Dodd-Frank Act is July 22, 2010. The only way the increase in TILA’s civil liability cap would have a different effective date would be if Congress provided one elsewhere in the Act.

I agree that section 1400(c) applies to all sections of Title XIV of the Dodd-Frank Act. As a result, I conclude, contrary to plaintiff’s contention, that section 1416 did not become effective on July 22, 2010, and therefore the relevant cap on statutory damages under TILA at the time plaintiff purchased the 1992 Honda Accord was $1,000.

The court also awards plaintiff damages of $1,106.44 for defendant’s violation of Virginia usury law, Va. Code § 6.2­-303(A). The court enters an order declaring defendant’s security interest in the car void and unenforceable, as plaintiff did not sign a security agreement. He court orders defendant to release the lien, give the car’s title back to plaintiff and to return to plaintiff any keys to the vehicle he is holding.

The court awards plaintiff damages of $2,106.44.

Hummel v. David W. Hall t/a Country Motor Sales (Moon) (Published) No. 6:11cv00012, June 19, 2012; USDC at Lynchburg, Va. VLW 012-3-269, 21 pp.