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Accruing Interest During the Rescission Period
by: Andy Zavoina, BOL Guru
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Question: My question relates to interest accrual during the rescission period. If an institution wants to accrue interest during the rescission period, and there are no other prohibitions, i.e., state law, usury issues, etc. how do you document that the borrower "has use" of the funds even though they can't physically access them until the rescission period passes?

Answer: The fact that you had to commit those funds by putting them aside for this purpose is evidence that the customer owes interest "for the use of" them.

First published on BankersOnline.com 6/3/02




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