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Right of Rescission Rule Interpretation

I need some help with the right of rescission rule interpretation. On a refi loan, if the borrowers receive all TRID disclosures on a Saturday but our offices are closed that day so their signatures would have to be made on Monday. My question is, when should the 3 day rescission period begin? On Monday- Wednesday ( based on disclosures received on Saturday) or Tuesday-Thursday ( based on the effective signing date of Monday)? Reg Z states: 1026. 15(a)(3) i. The period within which the consumer may exercise the right to rescind runs for 3 business days from the last of 3 events: A. The occurrence that gives rise to the right of rescission. B. Delivery of all material disclosures that are relevant to the plan. C. Delivery to the consumer of the required rescission notice.

by Dan Persfull:

If you provide the Rescission Notice on Saturday the 3 business days starts on Monday and expires at midnight on Wednesday. That is assuming the following Monday is not a Federal Holiday.

However, if your offices are closed on Saturday how did you provide the Rescission Notice on Saturday?


by Jim Bedsole:

Well, first, the original poster cites TRID disclosures being provided but then provides language from the Open-End rescission section of Reg Z. The closed end section at 1026.23 is similar, but slightly different in that the first listed criteria that must be met for rescission to start is consummation of the loan, not "occurence that gives rise..." If the loan is truly a closed-end TRID loan, and if the TRID disclosures (which I would presume includes the Closing Disclosure) were delivered on Saturday, the earliest the loan could close (consummation) under TRID rules would be Wednesday. If consummation takes place on Wed, even if rescission notice had been provided on Saturday, rescission doesn't start until the LAST of the three events, so in this case, rescission wouldn't even START until Wed with consummation and would expire at midnight on the following Saturday.


by John Burnett:

If the original poster (OP) is referring to signing the disclosures and receipt for the rescission (not recession) notices, there's no regulatory requirement for those signatures. Therefore, if they were truly received by the consumers on Saturday, closing could, as Jim said, close on Wednesday.

First published on 11/17/2019

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