                  UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT
                        ____________________

                           No. 97-31226
                       ____________________

                    STEFANIE RIVIERE, ET AL.,
                                                         Plaintiffs,

              STEFANIE RIVIERE; THOMAS STURDEVANT,

                                              Plaintiffs-Appellants;

                              versus

                 BANNER CHEVROLET, INC., ET AL.,

                                                         Defendants,

                     BANNER CHEVROLET, INC.,

                                              Defendant-Appellee.
_________________________________________________________________

           Appeal from the United States District Court
               for the Eastern District of Louisiana
_________________________________________________________________

                          August 6, 1999

Before JONES, DUHÉ, and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

     For this appeal concerning the Truth in Lending Act, the

defendant/appellee automobile dealer from whom Appellants purchased

a vehicle having prevailed in a bench trial on the basis that the

dealer is not a “creditor” within the meaning of the Act, that

issue and whether the transaction was a “consumer transaction” for

purposes of the Act are the primary matters at hand.   We VACATE and

REMAND for further proceedings.

                                  I.
       In December 1994, Thomas Sturdevant and his wife, Stefanie

Riviere, (Appellants) purchased a white pickup truck from Banner

Chevrolet.       After    that   truck     was      damaged    in   September   1995,

Appellants returned it to Banner for repairs.                       By check, their

insurer paid approximately $2,100 to them and $242 to Banner for

the damage/repairs.

       Appellants testified that, when they returned to Banner to

retrieve the truck in October 1995, it was not completely repaired.

Sturdevant then discussed with Frank Tessitore, a Banner salesman,

trading in the truck toward the purchase of a new one.                     Appellants

did so on 13 October 1995, purchasing a new gold pickup.

       The purchase was a credit transaction.                  Banner completed the

form   “Retail    Instalment     Contract”,          identifying     Banner    as   the

“Vendor/Creditor”        and   containing       a    section    captioned     “Federal

Truth-In-Lending Disclosures”, in which, among other things, Banner

stated the “finance charge” and “amount financed”.                     The contract

provided that Banner assigned its interest to General Motors

Acceptance Corporation (GMAC).

       In conjunction with the purchase, Tessitore had the white

truck appraised and offered Sturdevant $10,000 on the trade-in.

Sturdevant   refused.          Following    a       second    appraisal,    Tessitore

offered to value it at $12,000.                  Sturdevant accepted; but, he

testified that he understood the appraisal to represent the value

                                     - 2 -
of the truck in its still-damaged condition.              Tessitore testified

that the     white    truck   was   fully     repaired;   that    the    appraisal

represented its value in that condition.

        During the sales transaction, Sturdevant was in possession of

the $2100 insurance check.            Tessitore testified that he told

Sturdevant to give the check to the body shop manager as payment

for the work on the white truck; and that Sturdevant assured him

that he would.       However, Appellants kept the check.

        Accordingly, the day after Appellants took possession of the

gold truck, Tessitore asked Sturdevant for the insurance check.

Sturdevant refused.       (Banner subsequently obtained a state court

judgment against Appellants for the amount due for the repairs.)

        Approximately   two   weeks    later,      Appellants    refinanced      the

purchase.      As    discussed   infra,     they    maintain     that,   prior    to

refinancing, the new truck was used solely for consumer, not

business, purposes.

        In November 1995, Appellants filed this action, claiming that

Banner had violated the Truth in Lending Act (TILA), 15 U.S.C. §

1601 et seq.1    Following a bench trial, the district court ruled in




    1
       Appellants also presented claims against Banner’s attorneys
under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692,
based on a demand letter to Appellants from Banner’s attorneys.
These claims were dismissed following Appellants’ presentation of
evidence at trial. No appeal was taken from that dismissal.
                                      - 3 -
favor of Banner, on the basis that it was not a “creditor” within

the meaning of TILA.2

                                     II.

     Factual findings are reviewed for clear error; questions of

law, de novo.    E.g., Bridges v. City of Bossier, 92 F.3d 329, 332

(5th Cir. 1996), cert. denied, 519 U.S. 1093 (1997).            Appellants

maintain that Banner is a TILA “creditor”; that the sale of the

gold truck was a consumer transaction; and that Banner violated

TILA.   (For purposes of this opinion, we need not describe the two

claimed violations.)

                                     A.

     Enacted    to   ensure   the   “informed    use   of   credit   results

[through] an awareness of the cost thereof by consumers”, TILA

attempts to achieve this goal by mandating “a meaningful disclosure

of credit terms”.    15 U.S.C. § 1601(a).       See also Fairley v. Turan-

Foley Imports, Inc., 65 F.3d 475, 479 (5th Cir. 1995) (“purpose of




    2
      A prior panel affirmed. Appellants then sought rehearing en
banc. Amicus briefs urging the court to reconsider its decision
with regard to the creditor issue were filed by the Commercial Law
League of America, the National Association of Consumer Advocates,
the National Consumer Law Center, the American Bankers Association,
the Consumer Bankers Association, the American Financial Services
Association, and the Louisiana Bankers Association.       The prior
panel granted rehearing and vacated its opinion. See Riviere v.
Banner Chevrolet, Inc., 158 F.3d 335 (5th Cir. 1998), vacated, 166
F.3d 727 (5th Cir. 1998).


                                    - 4 -
TILA is to protect the consumer from inaccurate and unfair credit

practices”).

      In the light of TILA’s purpose and the fact that, among other

functions related to being a traditional creditor, Banner completed

the   form   retail   installment   contract,   including   the   TILA

disclosures and identifying itself as the “Vendor/Creditor”, it

should follow that Banner is the TILA “creditor”.    But, of course,

we must look to TILA to make that determination.    Along this line,

Appellants contend that the district court, in holding that Banner

was not a TILA “creditor”, erred in its interpretation of TILA and

the applicable regulation and by rejecting the official Federal

Reserve Board (FRB) commentary.     We agree.

      Prior to the enactment of the Truth in Lending Simplification

and Reform Act, Pub. L. No. 96-221, 94 Stat. 132, 168 (1980)

(TILSRA), the TILA definition of “creditor” distinguished between

“creditors” and “credit arrangers”, defining a “creditor” as one

“who regularly extend[s], or arrange[s] for the extension of,

credit”.     15 U.S.C. § 1602(f)(1980) (subsequently amended by

TILSRA); see also 12 C.F.R. § 226.2(s)(1980) (pre-TILSRA regulatory

definition of “creditor”).    Applying this former definition, the

Supreme Court held that an automobile dealer was a TILA “credit

arranger” because it merely arranged for credit with a finance

company which, in turn, became the immediate assignee of the

                                - 5 -
underlying contract.   See Ford Motor Credit Co. v. Cenance, 452

U.S. 155, 157-58 (1981)(per curiam).   The Court acknowledged that

both the dealer and the finance company fit within the pre-TILSRA

definition of “creditor”, with the finance company’s role in the

transaction similar to that of a traditional creditor.   Id.

     In response to Cenance, Congress enacted TILSRA (effective in

1982) and amended the definition of “creditor”.   As a result, TILA

presently defines a “creditor” as

          a person who both (1) regularly extends,
          whether in connection with loans, sales of
          property or services or otherwise, consumer
          credit which is payable by agreement in more
          than four installments or for which the
          payment of a finance charge is or may be
          required, and (2) is the person to whom the
          debt   arising  from  the   consumer  credit
          transaction is initially payable on the face
          of the evidence of indebtedness or, if there
          is no such evidence of indebtedness, by
          agreement.

15 U.S.C. § 1602(f).   The legislative history of TILSRA reflects

that Congress sought to simplify the definition of “creditor”. See

S. Rep. No. 96-73, 1979 WL 10376 at *15 (1979) (TILSRA simplified

definition of “creditor” to “eliminate confusion under the current

act as to the responsibilities of assignees and ‘arrangers of

credit’”).

     When it enacted TILA, Congress “delegated expansive authority

to the Federal Reserve Board to elaborate and expand the legal


                              - 6 -
framework governing commerce in credit”.        Fairley, 65 F.3d at 479

(quoting Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559-60

(1980)).   To implement TILA, the FRB promulgated “Regulation Z”,

located at 12 C.F.R. § 226.         See id.     Regulation Z defines a

“creditor” as “[a] person (A) who regularly extends consumer credit

..., and (B) to whom the obligation is initially payable, either on

the face of the note or contract, or by agreement when there is no

note or contract”. 12 C.F.R. § 226.2(a)(17)(i). Regulation Z also

contains   an   official   FRB   staff    interpretation   regarding   the

distinction between “creditors” and “assignees”:

           If an obligation is initially payable to one
           person, that person is the creditor even if
           the obligation by its terms is simultaneously
           assigned to another person. For example:
           *An auto dealer and a bank have a business
           relationship in which the bank supplies the
           dealer with credit sale contracts that are
           initially made payable to the dealer and
           provide for immediate assignment of the
           obligation to the bank.      The dealer and
           purchaser execute the contract only after the
           bank approves the creditworthiness of the
           purchaser.     Because   the  obligation   is
           initially payable on its face to the dealer,
           the dealer is the only creditor in the
           transaction.

12 C.F.R. pt. 226, supp. I, subpt. A, cmt. 2(a)(17)(i)(2) (emphasis

added).

     The district court concluded that Banner was not a TILA

“creditor” for two reasons: it was not an extender of credit


                                  - 7 -
because,     although    its      credit    department       investigates         credit

histories and prepares forms, it is ultimately GMAC or other

entities to which Banner subsequently assigns a loan that actually

make the loan and thereby extend the credit; and, according to the

district court, the obligation was not initially payable to Banner.

Accordingly,     the    court     also   found     that    Regulation       Z   was   not

applicable to Banner.           See 12 C.F.R. § 226.2(a)(17)(i) (defining

creditor as one “to whom the obligation is initially payable”). In

so   deciding,     the       district      court    rejected        the     FRB   staff

interpretation of “creditor”.

     In Green v. Levis Motors, Inc., 1999 WL 414224, *1 (5th Cir.

1999), an automobile dealer executed a retail installment contract,

which included TILA disclosures, and assigned the contract to

Hancock    Bank.       (It   is   not    clear     whether    the    assignment       was

simultaneous.)         The    purchasers     sued    the     dealer       and   Hancock.

Without addressing the applicability of TILA to the dealer, our

court treated it as a TILA “creditor” and held that it had

committed TILA violations.          Id. at *7-8.      Hancock was treated as an

assignee.     Id. at *8.

     In Green, our court did not explicitly address the issue

before us.    But, its disposition could only be reached by treating




                                         - 8 -
the automobile dealer as a TILA “creditor”.3               See also Ellis v.

General Motors Acceptance Corp., 160 F.3d 703, 705-08 (11th Cir.

1998)       (treating   GMAC   as    assignee,   even   though   contract   was

simultaneously assigned to it by automobile dealer); Taylor v.

Quality Hyundai, Inc., 150 F.3d 689 (7th Cir. 1998), cert. denied,

119 S. Ct. 1032 (1999) (treating automobile dealer as “creditor”

and financing companies as assignees).

     In this regard, the district court erred by rejecting the FRB

staff commentary.        In Milhollin, 444 U.S. at 565-66, the Supreme

Court stated        that,   “[u]nless    demonstrably    irrational,   Federal

Reserve Board staff opinions construing [TILA or Regulation Z]

should       be   dispositive”.        The   staff   interpretation    is   not

demonstrably irrational.            See Kinzel v. Southview Chevrolet Co.,

892 F. Supp. 1211, 1216 (D. Minn. 1995) (staff interpretation of

“creditor” is rational, “as it simply restates the congressional

intent to eliminate an ambiguity in the statute prior to October,

1982").



        3
      Regarding a similarly structured transaction, several other
district courts have found that an automobile dealer, such as
Banner, was a “creditor” under TILA. See Baldwin v. Laurel Ford
Lincoln-Mercury, Inc., 32 F. Supp. 2d 894, 904 (S.D. Miss. 1998);
Kinzel v. Southview Chevrolet Co., 892 F. Supp. 1211, 1216 (D.
Minn. 1995); Frazee v. Seaview Toyota Pontiac, Inc., 695 F. Supp.
1406, 1408 (D. Conn. 1988).      But see Augustine v. Ray Brandt
Nissan, Inc., 1993 WL 557680, *1 (1993) (automobile dealer not a
“creditor” because it was not the entity that actually provided the
funds).
                                        - 9 -
     As noted supra and by the district court, Banner identified

itself    in    the   form    retail     installment   contract   as    the

“Vendor/Creditor”.     In the light of this, viewing the contract as

a whole, and applying the FRB staff interpretation, the obligation

was initially payable to Banner, even though it was assigned to

GMAC.    See 12 C.F.R. § 226, supp. I, subpt. A, cmt. 2(a)(17)(i)(2)

(even where obligation is simultaneously assigned to another,

automobile dealer is “creditor” if obligation is “initially payable

on its face” to automobile dealer).         The staff interpretation also

makes it clear that, although Banner simultaneously assigned the

loan to GMAC, it still “extended credit” as a “creditor” under

TILA.    Id.

                                       B.

     As a second basis for TILA not being applicable, Banner

maintains, as it did in district court, that the sale of the gold

truck was a business, not a consumer, transaction.            TILA exempts

“transactions     involving    extensions     of   credit   primarily   for

business, commercial, or agricultural purposes”.              15 U.S.C. §

1603(1); see also Poe v. First National Bank of DeKalb County, 597

F.2d 895, 896 (5th Cir. 1979).     Further, TILA states that it covers

“consumer” credit transactions, defined as those “in which the

party to whom credit is offered or extended is a natural person,

and the money, property, or services which are the subject of the

                                  - 10 -
transaction     are   primarily     for   personal,     family,    or    household

purposes”.     15 U.S.C. § 1602(h).

     Therefore, “[w]e must examine the transaction as a whole and

the purpose for which the credit was extended in order to determine

whether this transaction was primarily consumer or commercial in

nature”.   Tower v. Moss, 625 F.2d 1161, 1165 (5th Cir. 1980).                   At

trial, Banner maintained that Sturdevant intended to use the gold

truck for his construction business.              In support, it introduced

Sturdevant’s 1995 business tax return, which claimed a deduction

for 100% of the use of the white truck and for 70% of the use of

the gold truck.        Further, Tessitore testified that Sturdevant

removed his tool box (as noted, he worked in construction) and mat

(used to protect the truck bed) from the white truck and placed

them in the gold truck; and that, in his experience, the mat is

used to protect vehicles used for work.

     Banner asserts that, in the light of this, it follows that

Sturdevant     purchased     the   gold   truck   for   his    business.        But,

Sturdevant testified that he never used it for his business in

1995.

     And, when questioned regarding the 1995 tax return, he claimed

that his tax preparer took the deduction without his knowledge. He

also testified that he did not use the gold truck for business

during   the    two   week    interval    between     its     purchase    and   its

                                     - 11 -
refinancing.        Riviere testified that, during those two weeks, she

used the truck for transportation to her place of work.                         Further,

all documents executed in connection with the sale of the gold

truck indicate that it was a consumer transaction.                          Finally, the

title    and      loan     documents   were     drafted        in     Riviere’s      name.

(Sturdevant testified that her name was used because of his poor

credit.)

       Obviously, the evidence is conflicting.                      That the documents

relevant     to     this    transaction   label    it     as    “consumer”          is   not

dispositive.        The few cases that address this issue look to the

substance      of    the    transaction   and     the   borrower’s           purpose      in

obtaining the loan, rather than the form alone.                           See Tower, 625

F.2d    at   1166-67       (although   loan   money     used         to    repair    house

subsequently leased to third party, loan primarily personal in

nature because evidence established that borrower intended to

reside in house during retirement and lessee functioned primarily

as caretaker); Henson v. Columbus Bank and Trust Co., 651 F.2d 320,

326-27 (5th Cir. 1981) (loan not personal investment loan where

borrower invested in company of which he was holder of one-fifth

stock, director, guarantor of debts, corporate secretary, and legal

counsel); Poe, 597 F.2d at 896 (loan primarily for business even

though stockholder and wife were required to co-sign and pledge

their family home as security); Bloom v. I.C. System, Inc., 972

                                       - 12 -
F.2d 1067, 1069 (9th Cir. 1992) (loan not primarily personal in

nature where borrower used money to invest in company of which he

was president).

     In    short,   resolution   of   this   issue    involves       a    factual

determination of Appellants’ purpose in purchasing the gold truck,

which hinges on Sturdevant’s credibility.            Although the district

court discussed the evidence regarding this issue, it did not make

factual findings regarding the purpose             for the purchase.           Of

course, we may, in our discretion, resolve this issue for the first

time on appeal.     See Green, 1999 WL 414224 at *6 (citing Singleton

v. Wulff, 428 U.S. 106, 120-21 (1976)).

     But, cutting against our doing so is, inter alia, the district

court’s noting that, had it proceeded to the merits of the TILA

claims, it would have credited Tessitore’s testimony that the

repairs to the white truck constituted a separate transaction from

the sale of the gold truck.           In so doing, the court rejected

Sturdevant’s version.     Because the court apparently found at least

one portion of Sturdevant’s testimony to lack credibility, we are

reluctant to decide the consumer transaction issue, which, as

noted, turns primarily on his credibility.

     The better course is to remand to the district court for

findings    of   fact.    Obviously,      should     it   find   a       consumer

transaction, it should then rule on the claimed TILA violations.

                                 - 13 -
                             III.

    For the foregoing reasons, the judgment is VACATED and this

case is REMANDED for further proceedings consistent with this

opinion.

                                         VACATED and REMANDED




                            - 14 -
