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Customer Steps to Waive 3 Day Re​s​ci​s​sion

Question: 
What does a customer need to do to waive the three​-​day re​s​ci​s​sion​ period​?
Answer: 

Answer by Randy Carey:

Open-end loan:

1026.15(e) Consumer's waiver of right to rescind. The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers entitled to rescind. Printed forms for this purpose are prohibited.

Official Interpretation

15(e) Consumer's Waiver of Right To Rescind

1. Need for waiver. To waive the right to rescind, the consumer must have a bona fide personal financial emergency that must be met before the end of the rescission period. The existence of the consumer's waiver will not, of itself, automatically insulate the creditor from liability for failing to provide the right of rescission.

2. Procedure. To waive or modify the right to rescind, the consumer must give a written statement that specifically waives or modifies the right, and also includes a brief description of the emergency. Each consumer entitled to rescind must sign the waiver statement. In a transaction involving multiple consumers, such as a husband and wife using their home as collateral, the waiver must bear the signatures of both spouses.

Closed-end loan:

1026.23(e) Consumer's waiver of right to rescind. The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers entitled to rescind. Printed forms for this purpose are prohibited.

Official Interpretation

23(e) Consumer's Waiver of Right to Rescind

1. Need for waiver. To waive the right to rescind, the consumer must have a bona fide personal financial emergency that must be met before the end of the rescission period. The existence of the consumer's waiver will not, of itself, automatically insulate the creditor from liability for failing to provide the right of rescission.

2. Procedure. To waive or modify the right to rescind, the consumer must give a written statement that specifically waives or modifies the right, and also includes a brief description of the emergency. Each consumer entitled to rescind must sign the waiver statement. In a transaction involving multiple consumers, such as a husband and wife using their home as collateral, the waiver must bear the signatures of both spouses.

Answer: 

Answer by Richard Insley:

Add one more step at the beginning--the customer must convince you that, indeed, s/he has a "bona fide personal financial emergency." These cases are extremely rare.

Answer: 

Answer by David Dickinson:

I also recommend, although not required, to have the customer put their request for a waiver (and reasons) in handwriting. Not a typed letter. That way it is crystal clear to all that this was a request from the customer and not something the loan officer prepared and had them sign.

First published on 09/02/2018

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