Billings v. Propel Financial Services
- Summarized by J. Newman , Newman & Newman
- 8 years 8 months ago
- Citation:
- 14-51326, consolidated with 15-50199, 15-50340, 15-50437 USCA Fifth Circuit
- Tag(s):
-
- Ruling:
- The transfer of a tax lien does not constitute an extension of “credit” that is subject to the Truth in Lending Act. In addition to TILA, this case concerns the Homeowner Equity and Protection Act (“HOEPA”). See 15 U.S.C. §§ 1602, 1639.
- Procedural context:
- The Fifth Circuit AFFIRMED the district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6) in Billings, et. al. v. Propel Financial Services, L.L.C., No. 14-51326, and REVERSED the district courts’ denials of defendants’ motions to dismiss in Torres v. Propel Financial Services, L.L.C., No. 15-50199; Thiery v. Texas Tax Solutions, L.L.C., No. 15-50340; and Orosco v. Ovation Lending, L.L.C., No. 15-50437.
- Facts:
- In each of these four consolidated cases, plaintiffs are individuals who obtained property tax loans from defendant property tax lenders in exchange for the transfer of their tax liens pursuant to Sections 32.06 and 32.065 of the Texas Tax Code. Each loan was evidenced by a promissory note executed by the plaintiff and payable to the lender. In each case, plaintiffs brought suit against the defendant lenders alleging, inter alia, that defendants committed TILA violations. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), contending that TILA does not apply because tax lien transfers are not “consumer credit transactions” as defined by TILA. In three of the consolidated cases, the district court denied defendants’ motions to dismiss, concluding that TILA does apply to the tax lien transfers, but certified the question for immediate appeal. In the fourth case, the district court held that because property taxes are not “debt” under Texas law, and the transfer of the tax liens to a private party does not change the nature of the tax obligation such that it becomes “debt,” the transfer of a tax lien to a private lender is not a consumer credit transaction subject to TILA. These appeals, now consolidated, followed.
- Judge(s):
- BARKSDALE, CLEMENT, and HAYNES, Circuit Judges.
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