D. Use of Model Forms under TILA
Washington Mutual also argues that, even if the court does not find
that it complied with TILA in this transaction, the court should deem its
disclosures adequate because it used Federal Reserve model forms for its
TILA Disclosure and that the use of that form satisfies the requirement
that TILA-required disclosures be made "clearly and conspicuously." See
15 U.S.C. § 1632 (stating in the section entitled "Form of
disclosure" that "information required by this sub-chapter shall be
disclosed clearly and conspicuously"). Leon contends, however, that
Washington Mutual's mere use of model forms does not constitute automatic
compliance with TILA. The court agrees with Leon.
On the TILA Disclosure, Washington Mutual disclosed the security
interest in the transaction by checking a box next to the phrase "the
goods or property being purchased," which, in turn, was under the heading
"SECURITY: You are giving a security interest in." (Compl. Ex. D at 1.)
At issue in this case is not the clarity or conspicuousness of the
security interest disclosure on the TILA Disclosure. Rather, this case
centers around whether that language was sufficient when compared to the
substantive terms of the Rider.
Although it is true that, under TILA, "a creditor or lessor shall be
deemed to be in compliance with the disclosure provisions of this
sub-chapter with respect to other than numerical disclosures if the
creditor or lessor . . . uses any appropriate model form or clause as
published by the board," 15 U.S.C. § 1604 (b), that protection does
not extend to inadequate content of the disclosure forms. Washington
Mutual appears to be arguing that merely using a model form for a TILA
disclosure will, without regard for the content of the form or its
consistency with the other loan documents, bring a lender into compliance
with TILA. Washington Mutual, however, cites no authority, nor can the
court find any, to support this proposition. The court will not grant
Washington Mutual immunity from TILA disclosure violations simply by
virtue of the fact that it used model forms. See Urone-Shadow v. Union
Nissan, 955 F. Supp. 938, 944 (N.D. Ill. 1997) (barring consumer's claims
as to the form of the contract in a TILA case due to lender's compliance
with the model form, but refusing to bar consumer's claims as to the
substance of the contract).
Because Leon's claims in this case go to the substance of the security
interest disclosure and its consistency with the Rider, and not to the
mere form of the TILA Disclosure, the court cannot conclude as a matter
of law that Washington Mutual is protected from TILA liability.
Consequently, the court cannot conclude as a matter of law that
Washington Mutual complied with TILA in this transaction.
For the foregoing reasons, the court denies defendant's motion for
judgment on the pleadings.