Extra Odd Days

Another protection in the new regulatory provisions deals with odd days, unanticipated odd days, to be exact. Given the many changes that occur in closing schedules, it has often been necessary to prepare Truth in Lending disclosures more than once to ensure accuracy. For example, a closing postponed from Tuesday to Friday results in three extra odd days interest. Careful creditors redisclosed to include those extra days and avoid any challenges to the disclosure's accuracy.

Now the FRB has made such extra disclosures unnecessary. New paragraph 226.17(c)(2)(ii) provides that when odd days, or per diem, interest is being calculated, the disclosure is considered accurate if it was accurate when prepared and based on the information known to the creditor when prepared.

If disclosures are prepared for a closing scheduled for Tuesday and the disclosures are accurate, they remain legally accurate even when the borrower or closing agent postpones closing for several days. However, if the creditor knows about the delayed date before preparing disclosures, the creditor should use the new date for calculation of odd days interest. That would ensure that the disclosures are based on "information known to the creditor at the time that the disclosure documents are prepared."

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 15, 10/96