HELOCs
Lyons v. PNC Bank
Date: Feb. 2, 2026
Issue: Whether PNC Bank unlawfully withdrew money from William Lyons’ checking account to cover a home equity line of credit (HELOC).
Case Summary: A Maryland federal court refused to dismiss a lawsuit alleging that PNC Bank unlawfully withdrew money to cover a HELOC, ruling that customer William Lyons Jr. had standing to sue.
In August 2020, William Lyons Jr. sued PNC in a class action alleging violations of TILA related to PNC’s setoff of funds from two of his deposit accounts to pay outstanding balances on his HELOC. The lawsuit stemmed from two offset transactions, one in September 2019 for $1,396.97 and another in February 2020 for approximately $1,598.99, after Lyons fell behind on required monthly payments. In the September 2019 instance, PNC initiated an offset but later reversed it when Lyons made a same-day payment, although he contends he lacked access to the funds for several days before they were restored. In February 2020, PNC again exercised its contractual right of offset to satisfy past-due amounts, and Lyons later paid off the HELOC in June 2020. Dismissing the case, the court concluded that TILA’s language, as interpreted in Regulation Z, could not support Lyons’ argument that the offset provision applies to HELOCs. The court emphasized that Lyons’ loan was a HELOC rather than a credit card plan and that Regulation Z expressly distinguishes between the two.
On appeal, the Consumer Financial Protection Bureau filed an amicus brief arguing TILA’s offset provision applies to HELOCs accessible by credit card. In response, ABA filed an amicus brief supporting PNC, arguing that HELOCs and credit cards are fundamentally different products; a HELOC is not a “credit card plan” under TILA’s offset provision; and CFPB’s interpretation is not entitled to deference.
In a 2-1 decision, a Fourth Circuit panel reversed in part, affirmed in part, and remanded, ruling the offset provision applies to HELOCs. The panel concluded the term “credit card plan” included HELOCs, based on TILA’s statutory and regulatory history, language, and context. On August 28, 2024, PNC petitioned for panel rehearing and rehearing en banc. ABA filed another amicus brief in support of PNC, but in November 2024, the Fourth Circuit denied without providing further comment.
On remand, Judge Stephanie Gallagher of the U.S. District Court for the District of Maryland ruled that Lyons had standing. Previously, PNC moved to dismiss or, in the alternative, for summary judgment, arguing that Lyons could not show recoverable damages or a concrete injury, lacked Article III standing, and could not represent the proposed class. The court explained that Article III requires a plaintiff to prove injury in fact, traceability, and redressability, and that at the summary judgment stage, the plaintiff must support standing with evidence rather than mere allegations. PNC challenged only the injury-in-fact requirement and argued that its offsets to satisfy Lyons’s undisputed HELOC debt amounted at most to a statutory violation without concrete harm, especially because Lyons admitted he owed the debt and his accounts did not earn interest.
The court agreed in part and concluded that a statutory violation alone does not establish a concrete injury when the plaintiff does not dispute the underlying debt or show additional harm. Because Lyons never disputed the HELOC balances, the February 2020 offset, which PNC applied to an undisputed debt and did not return, did not create a concrete injury based solely on loss of use. The court, however, found that the September 2019 offset temporarily deprived Lyons of access to nearly $1,400 before PNC reversed it. That temporary loss of use constituted a concrete injury sufficient to confer standing. The court thus denied PNC’s motion to dismiss for lack of subject matter jurisdiction.
Next, the court granted PNC’s motion for summary judgment on Lyons’s individual statutory and actual damages claims under Federal Rule 56(a). Lyons argued that he suffered actual damages from the inability to use his money and urged the court to measure those damages by applying Maryland’s 6% legal interest rate to the offset amounts from the date of withdrawal to the date of refund or judgment. Rejecting this theory, the court observed that Lyons’s deposit accounts did not earn interest and that he presented no evidence of any concrete financial harm resulting from the brief September 2019 deprivation.
The court held Lyons’s class certification motion in abeyance and ordered supplemental briefing. It rejected his attempt to broaden the class and instead adopted a narrower definition limited to borrowers in the five jurisdictions who entered into the National City Equity Reserve Agreement, received a credit card tied to the HELOC, and experienced an offset within one year before the complaint, regardless of card use.
Bottom Line: The court allowed Lyons’ challenge to PNC’s HELOC offset practices to proceed based on a temporary loss-of-use injury, but dismissed his individual damages claims and deferred ruling on class certification after narrowing the proposed class.
Document: Opinion
