A business partner asked me about CFPB guidance on sending the Closing Disclosure out too early. I cannot recall anything on this topic specifically. I've been under the impression once we have all required CD information, we can send the CD out regardless of the amount of time prior to closing.

Did I miss some CD timing guidance? Thanks.

As long as you have done your due diligence then you can send the CD early but you can't, shouldn't, send it early just to circumvent the timing requirement without determining the costs.

https://www.federalregister.gov/doc...er-the-truth-in-lending-act-regulation-z


" As noted above, the timing restriction on resetting tolerances creates a disincentive to providing consumers with Closing Disclosures very early in the lending process. Once a creditor has provided a Closing Disclosure, it can reset tolerances only if there are less than four business days between the time the revised version of the disclosures is required to be provided pursuant to § 1026.19(e)(4)(i) (i.e., within three business days of the time the creditor received information sufficient to establish the reason for revision) and consummation. The Bureau agrees with commenters who stated that the practice of providing very early Closing Disclosures with terms that are nearly certain to be revised would be contrary to the underlying purpose of the Closing Disclosure. While the Bureau acknowledges that eliminating the timing restriction on resetting tolerances with a Closing Disclosure could potentially affect the Closing Disclosure timing for some creditors, the Bureau does not believe that retaining the four-business day limit is an effective way to address potential issues associated with early Closing Disclosures."

And...

The Bureau concludes that the rule's existing provisions should prevent creditors from sending Closing Disclosures very early in the process before engaging in due diligence.

With respect to the accuracy standard that applies to the Closing Disclosure, the Bureau concludes that substantive changes to the TILA-RESPA Rule's existing provisions are not necessary to prevent creditors from sending Closing Disclosures very early in the process before engaging in due diligence. The Bureau believes the existing Closing Disclosure accuracy standard already accomplishes that objective. Existing § 1026.19(f)(1)(i) and comment 19(f)(1)(i)-1 require creditors to disclose on the Closing Disclosure the actual terms of the credit transaction. Existing comment 19(f)(1)(i)-2 also permits creditors to estimate disclosures on the Closing Disclosure using the best information reasonably available when the actual term is not reasonably available to the creditor at the time the disclosures are made. Comment 19(f)(1)(i)-2 provides that the “reasonably available” standard requires that the creditor, acting in good faith, exercise due diligence in obtaining the information. Further, comment 19(f)(1)(i)-2.i.A provides an example illustrating the “reasonably available” standard for purposes of § 1026.19(f)(1)(i). Specifically, comment 19(f)(1)(i)-2.i.A assumes that a creditor provides the Closing Disclosure for a transaction in which the title insurance company that is providing the title insurance policy is acting as the settlement agent in connection with the transaction, but the creditor does not request the actual cost of the lender's title insurance policy that the consumer is purchasing from the title insurance company and instead discloses an estimate based on information from a different transaction. Comment 19(f)(1)(i)-2.i.A provides that the creditor in the example has not exercised due diligence in obtaining the information about the cost of the lender's title insurance policy required under the “reasonably available” standard in connection with the estimate disclosed for the lender's title insurance policy. Regarding a commenter's request for clarification as to whether creditors can reset tolerances using a Closing Disclosure after issuing an initial Loan Estimate but without ever issuing any revised Loan Estimate, the rule does not prohibit creditors from doing so but creditors must otherwise comply with the rule, including its Closing Disclosure accuracy standard. The Bureau will continue to monitor the market for practices that do not comply with the rule's Closing Disclosure accuracy standard."