More consumers have approached me lately concerning their students loans. They do not go away and enjoy high priority in terms of creditors and enforcement powers. As seen below, we see a guarantor and transferee debt collector prevail in federal court at the pleadings stage.
First off, as seen in the case Prowley v. Hemar Insurance Corp., decided May 5, 2010 in the Southern District, federally insured student loans are not limited by a statute of limitations. New York State Usury statutes do not apply to defaulted obligations.
The plaintiff debtor's pleading also fell short on General Business Law §349
In order to state a claim under New York General Business Law §349, Prowley must allege: "(1) the act or practice was consumer-oriented; (2) the act or practice was misleading in a material respect; and (3) the plaintiff was injured as a result." Spagnola v. Chubb Corp., 574 F.3d 64, 74 (2d Cir. 2009). In the case at bar, Prowley sets forth case law addressing §349 but asserts nothing more than conclusory factual allegations. Prowley does not allege that Defendants' conduct was directed at consumers at large. This litigation does not give rise to anything other than a private dispute lacking allegations of any wrongs directed against the consuming public. Further, the amended complaint is deficient in failing to allege any specific act by Defendants that was misleading, let alone misleading in a material way.
If you sue under TILA, you need more than conclusory allegations.
TILA is a disclosure statute that requires that the credit terms and the fees charged for the extension of credit are properly disclosed. See 15 U.S.C. §1637 (a). The purpose of TILA is to assure "meaningful disclosure of credit terms to consumers." See Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559 (1980) (citing 15 U.S.C. §1601) (internal quotations omitted). Failure to make a required disclosure and satisfy TILA may subject a lender to statutory and actual damages that are traceable to the lender's failure. Beach v. Ocwen Federal Bank, 523 U.S. 410, 412 (1998).