The Truth in Lending Act (TILA) requires that certain disclosures be given at the time of a refinance of a mortgage loan, including notice of a three-day cooling-off period. The purpose of the cooling-off period is to provide the consumer with three days to think it over and back out or unwind the transaction. If the creditor fails to give notice of the right to cancel, then the consumer has three years to exercise the right.

But is it enough to send a letter to the creditor saying "I rescind" or must the consumer actually file his/her lawsuit within the three years? Various federal courts of appeal have reached different conclusions creating a split of authority among the circuits.

The Eighth, Ninth, and Tenth Circuits (and probably the Sixth), relying on the Supreme Court's Beach v. Ocwen Federal Bank decision, have held that the consumer must actually file a lawsuit within the three year period.

The Third and Fourth Circuits have held that mere notice is enough to exercise the right — although in practice, consumer correspondence often provides less than clear notice of a desire to cancel (see Sixth Circuit's opinion in Lumpkin).

America's newest consumer watchdog, the Consumer Financial Protection Bureau, has weighed in with amicus briefs in the Third, Fourth, Eighth, and Tenth Circuits, arguing that bare notice is enough.

The disappointed consumers in the Eighth Circuit case have filed a petition for certiorari with the United State Supreme Court, asking it to resolve the split.