CFPB and State of Maine File Joint Amicus Brief in TILA Lawsuit  

On July 12, 2023, the CFPB and the State of Maine filed an amicus brief in the Maine Supreme Judicial Court challenging a trial court’s holding that a loan is not covered by the Truth in Lending Act (TILA) if the loan documents explicitly state that the loan has a commercial purpose.  The CFPB and the State of Maine argue that the proper approach to determine whether a loan is covered by TILA is by assessing the borrower’s primary purpose in entering into the transaction.

TILA affords borrowers entering into consumer credit transactions certain protections, such as its disclosure requirement and its ability-to-repay requirement.  These protections do not extend to loans that serve mainly business, commercial, or agricultural purposes.  The Maine Consumer Credit Code fully incorporates TILA.

In the brief, the CFPB and the State of Maine assert that the statutory text and administrative guidance, judicial precedent, and legislative intent support their assertion that determining the borrower’s primary purpose in entering into the transaction is the proper inquiry to determine whether the loan is covered by TILA.  The CFPB and the State of Maine warn that affirming the trial court’s conclusion would permit creditors to easily circumvent TILA’s requirements.