Our variable rate construction TIL states that the APR will increase if the prime rate increases, that it will not increase more often than every day, and that the rate increase will result in larger interest payments. If prime changes after the TIL is generated, are we covered with this disclosure, or do we need to draw up new disclosures? The documents are still accurate. Isn't this scenario already covered in our variable rate language, or is a new TIL required?

If your Regulation Z disclosures are correct, then you are covered. Is your loan a multiple advance loan? If so, did you provide estimated disclosures as directed under Appendix D of Regulation Z? If so, you should be covered for interest rate changes and a new disclosure is not required every time the rate changes. That's why Regulation Z provides for variable rate and estimated disclosures -- so you don't have to disclose over and over again.

This is why you never want to enter into constuction notes with a term greater than one year. If the term is greater than one year, then the loan is subject to the dsclosure requirements of 226.19(b) and 226.20(c). You don't want that, given that you never know when prime will change.