We gave the right to rescind on a HELOC and the midnight date to cancel is tonight. The borrower has contacted the bank and wants to extend the right to rescind a few more days because he hasn’t had a chance to read all of the documents and wants us to change/clarify some of the contract provisions. Reg Z requires the minimum of 3 days – we can allow cancellation beyond that, if we wish, correct? If we agree to extend the rescission period, the borrower is going to want a new Rescission Notice to confirm that he can still cancel the loan. Has anyone run into this before?

It is up to the bank.

The legally mandated rescission period ends before you open for business tomorrow. If you say you are extending the same rights for a longer period, you face the loss of all the fees and your lien on the property. Why should you voluntarily expose yourself to a loss because the borrower dragged her/his feet? If you are inclined to make a highly unusual exception to standard banking practices, what will you tell the next borrower with a similar request? What if that borrower is a protected class?

If you're willing to negotiate something, I would handle it outside the official ROR rules. It seems there should be a way to meet the borrower part of the way without eating all of your costs and possibly extending your exposure to TIL civil liability.

For the sake of fair lending and treating all borrowers the same, rescission ends at midnight. As it is a HELOC, the borrower can choose to draw or not.

Thank you very the feedback - very much appreciated!