Answer by Dan Persfull:Review the financial institutions obligations when a consumer rescinds in 226.15 and .23 and their Commentary. All monies paid by the consumer in connection with the transaction must be refunded and you must release your security interest. It is also advisable to contact your attorney. There could very well be a TIL liability action filed against your institution as well.
Answer by Richard Insley:First, I would determine how such a gross error could escape detection. Next, I would conduct an exhaustive file search (outsourcing the work if the project can't be handled within a few weeks) to determine the overall size of the problem. Then, I would develop an action plan for fixing whatever broke down, get it approved by the highest ranking officer in the affected business, and implement it yesterday. Finally, I would deal with the rescinded loan.
First published on BankersOnline.com 11/27/06