Credit card companies cannot evade their disclosure obligations by inserting "notice-and-cure" provisions in account-opening contracts, a federal judge has held in a case of apparent first impression in the Second Circuit.
Southern District Judge Colleen McMahon followed several courts around the country, but none in the Second Circuit, in concluding that banks cannot require consumers to give them a chance to address disclosure problems before bringing an action under the Truth and Lending Act (TILA). She said a contrary conclusion would "undermine Congress's intent in enacting" the statute.
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