Hi -
If a loan file shows that funds were disbursed prior to the rescission period expiring, what are the consquences of this? Is the loan subject to a 3 yr rescission period like when a disclosure is not given? FYI, proper disclosures were given - funds were just issued early, which Reg Z prohibits.

Where in the Reg can I find information on consequences / violations, etc?
Thanks.

The consequences are that if anytime during the penalty period, the borrower decides to rescind, then you have to give them their money back. This is usually done because the borrower has to forclose or is in bankruptcy. So, they are happy to give you the house (and have sometimes trashed it) and you give them their money.

Then there are possible Reg. Z penalties.

IMO yes. By disbursing the funds early you inappropriately waived their rescission rights.