In the case of David R. Beach, et ux. v. Ocwen Federal Bank in 1997, the U.S Supreme Court ruled that borrowers must file a lawsuit within three years of their loan's closing if they believe that their lender violated the Truth in Lending Act (TILA). The plaintiffs had argued that this time limit should not apply if lenders failed to provide certain disclosures required by TILA until after the three-year period had passed; however, the court disagreed and held firm on its interpretation of TILA’s statute of limitations provision. The Beaches had refinanced their home mortgage with Ocwen Federal Bank but later discovered discrepancies between what was disclosed about their loan terms and what they were actually charged. They filed suit four years after closing on grounds that these inconsistencies constituted violations under TILA. However, since they did not bring forth these claims within three years from when their transaction was consummated as stipulated by Section 1635(f) of TILA which extinguishes right to rescind at end of this period regardless whether lender has made necessary disclosures or not -the Supreme Court upheld lower courts' decisions dismissing Beaches’ claim for untimeliness.

The dissenting opinion in the case of David R. Beach, et ux. v. Ocwen Federal Bank argued that the majority's interpretation of the Truth in Lending Act (TILA) was too narrow and failed to consider Congress' intent when it enacted TILA. The dissenters believed that borrowers should be allowed to raise violations of TILA as a defense by recoupment after three years from consummation of the transaction, even if they could not affirmatively sue for damages beyond this period due to statute limitations set by TILA itself. They pointed out that allowing such defenses would not open floodgates for stale claims because these defenses can only reduce or extinguish a borrower's liability; they cannot lead to affirmative recovery against lenders. Moreover, they emphasized that their approach better aligns with Congressional intent behind enacting TILA - protecting consumers from unfair credit billing and credit card practices.