Comment for 1026.31 - General Rules | Consumer Financial Protection Bureau (2024)

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31(c) Timing of Disclosure

1. Furnishing disclosures. Disclosures are considered furnished when received by the consumer.

31(c)(1) Disclosures for high-cost mortgages.

1. Pre-consummation or account opening waiting period. A creditor must furnish §1026.32 disclosures at least three business days prior to consummation for a closed-end, high-cost mortgage and at least three business days prior to account opening for an open-end, high-cost mortgage. Under §1026.32, “business day” has the same meaning as the rescission rule in comment 2(a)(6)-2 - all calendar days except Sundays and the Federal legal holidays listed in 5 U.S.C. 6103(a). However, while the disclosure rule under §§1026.15 and 1026.23 extends to midnight of the third business day, the rule under §1026.32 does not. For example, under §1026.32, if disclosures were provided on a Friday, consummation or account opening could occur any time on Tuesday, the third business day following receipt of the disclosures. If the timing of the rescission rule were to be used, consummation or account opening could not occur until after midnight on Tuesday.

31(c)(1)(i) Change in Terms

1. Redisclosure required. Creditors must provide new disclosures when a change in terms makes disclosures previously provided under §1026.32(c) inaccurate, including disclosures based on and labeled as an estimate. A change in terms may result from a formal written agreement or otherwise.

2. Premiums or other charges financed at consummation or account opening. If the consumer finances the payment of premiums or other charges as permitted under §1026.34(a)(10), and as a result the monthly payment differs from what was previously disclosed under §1026.32, redisclosure is required and a new three-day waiting period applies.

31(c)(1)(ii) Telephone disclosures.

1. Telephone disclosures. Disclosures by telephone must be furnished at least three business days prior to consummation or account opening, as applicable, calculated in accordance with the timing rules under §1026.31(c)(1).

31(c)(1)(iii) Consumer's waiver of waiting period before consummation or account opening.

1. Modification or waiver. A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by §1026.32 and only if the circumstances meet the criteria for establishing a bona fide personal financial emergency under §1026.23(e). Whether these criteria are met is determined by the facts surrounding individual situations. The imminent sale of the consumer's home at foreclosure during the three-day period is one example of a bona fide personal financial emergency. Each consumer entitled to the three-day waiting period must sign the handwritten statement for the waiver to be effective.

31(c)(2) Disclosures for Reverse Mortgages

1. Business days. For purposes of providing reverse mortgage disclosures, “business day” has the same meaning as in comment 31(c)(1)-1 - all calendar days except Sundays and the Federal legal holidays listed in 5 U.S.C. 6103(a). This means if disclosures are provided on a Friday, consummation could occur any time on Tuesday, the third business day following receipt of the disclosures.

2. Open-end plans. Disclosures for open-end reverse mortgages must be provided at least three business days before the first transaction under the plan (see §1026.5(b)(1)).

31(d) Basis of Disclosures and Use of Estimates

1. Redisclosure. Section 1026.31(d) allows the use of estimates when information necessary for an accurate disclosure is unknown to the creditor, provided that the disclosure is clearly identified as an estimate. For purposes of Subpart E, the rule in §1026.31(c)(1)(i) requiring new disclosures when the creditor changes terms also applies to disclosures labeled as estimates.

31(d)(3) Per-Diem Interest

1. Per-diem interest. This paragraph applies to the disclosure of any numerical amount (such as the finance charge, annual percentage rate, or payment amount) that is affected by the amount of the per-diem interest charge that will be collected at consummation. If the amount of per-diem interest used in preparing the disclosures for consummation is based on the information known to the creditor at the time the disclosure document is prepared, the disclosures are considered accurate under this rule, and affected disclosures are also considered accurate, even if the disclosures were not labeled as estimates. (See comment 17(c)(2)(ii)-1 generally.)

31(h) Corrections and unintentional violations.

1. Notice requirements. Notice of a violation pursuant to §1026.31(h)(1) or (2) should be in writing. The notice should make the consumer aware of the choices available under §1026.31(h)(1)(iii) and (2)(iii). For notice to be adequate, the consumer should have at least 60 days in which to consider the available options and communicate a choice to the creditor or assignee.

2. Reasonable time. To claim the benefit of §1026.31(h), a creditor or assignee must implement appropriate restitution and the consumer's elected adjustment within a reasonable time after the consumer provides notice of that election to the creditor or assignee. What length of time is reasonable will depend on what changes to a loan or credit plan's documentation, disclosure, or terms are necessary to effectuate the adjustment. In general, implementing appropriate restitution and completing an adjustment within 30 days of the consumer's providing notice of the election can be considered reasonable.

Comment for 1026.31 - General Rules | Consumer Financial Protection Bureau (2024)

FAQs

What is the CFPB 3 day rule? ›

Pre-consummation or account opening waiting period.

A creditor must furnish § 1026.32 disclosures at least three business days prior to consummation for a closed-end, high-cost mortgage and at least three business days prior to account opening for an open-end, high-cost mortgage.

What is the 3 day initial disclosure rule? ›

The three-day period is measured by days, not hours. Thus, disclosures must be delivered three days before closing, and not 72 hours prior to closing. Note: If a federal holiday falls in the three-day period, add a day for disclosure delivery.

What are the exceptions to the Trid guidelines? ›

Most consumer mortgage loan closings are covered. Exceptions include reverse mortgages, open-ended loans such as HELOCS, loans for business, commercial, or agricultural purposes, and loans made to other than natural persons.

Can you waive the 3 day CD rule? ›

A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circumstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).

What is CFPB rules? ›

Rules and policy

The CFPB implements and enforces federal consumer financial laws to ensure that all consumers have access to markets for consumer financial products and services that are fair, transparent, and competitive.

Who do CFPB rules apply to? ›

We have supervisory authority over banks, thrifts, and credit unions with assets over $10 billion, as well as their affiliates. The depository institutions and affiliates included in the list below are currently under CFPB's jurisdiction and subject to CFPB supervision and examination.

How many days after CD can you close? ›

But how long before closing should you be supplied with the CD? This is where the Three Day Rule comes into play. This rule is simply put into place to ensure you have received the closing disclosure three days before closing.

What happens after 3 day closing disclosure? ›

If changes need to be made, you have 3 additional business days prior to closing to review the revised Closing Disclosure. Once they've been fixed, compare the Loan Estimate and Closing Disclosure again to ensure that they match up.

Can a loan be denied after clear to close? ›

Yes, you could get denied after you've been cleared to close. In the days leading up to your closing, do your best to make sure nothing happens that makes you look like a riskier borrower. Your safest bet is to avoid making any financial moves during this period, such as: Apply for any new credit cards or loans.

Who is exempt from TRID? ›

To qualify for the Partial Exemption from the TRID disclosure requirements under the BUILD Act, the loan must be a residential mortgage loan, offered at a 0 percent interest rate, have only bona fide and reasonable fees, and be primarily for charitable purposes and be made by an organization described in Internal ...

What transactions are not covered by Trid? ›

Loans Not Covered by TRID
  • Home-equity lines of credit.
  • Reverse mortgages.
  • Mortgages secured by a mobile home or dwelling not attached to land.
  • No-interest second mortgage made for down payment assistance, energy efficiency or foreclosure avoidance.
  • Loans made by a creditor who makes five or fewer mortgages in a year.

What is not covered by Trid? ›

The rule does NOT apply to Home Equity Line of Credit transactions reverse mortgages mortgages secured by a mobile home or other dwelling that is not attached to real property. Also, TRID rules do NOT apply to loans made by a person or business that makes 5 or fewer mortgages in a calendar year.

What is the 7 business-day rule for Trid? ›

Under the TRID rule, credit unions generally must provide the Loan Estimate to consumers no later than seven business days before consummation. Members must receive the Closing Disclosure no later than three business days before consummation.

Is Saturday a business-day for closing disclosure? ›

This three business-day rule was introduced in October of 2015, and it applies to both original mortgages and refinancing. When your three business-day waiting period starts is determined by your consummation day. This three business-day rule may include Saturdays, but it does not count Sundays or holidays.

Why do you have to wait 3 days after closing disclosure? ›

This gives you time to review the terms of the deal before you get to the closing table. Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing.

What does "within 3 days of closing" mean? ›

The rule says the borrower must receive the CD three business days before the closing. So, in this scenario if the borrower acknowledged receipt of the CD on a Thursday, three business would mean the closing could take place on Monday.

What is the 3 day rule for loan estimates? ›

The TRID rule requires lenders to provide two disclosure documents to lenders: a loan estimate and a closing disclosure. Because each document must be timed to give the borrower three days to look it over, it's sometimes referred to as the “three-day rule.”

Which of the following disclosures must be given within 3 business days? ›

Servicing Disclosure Statement

RESPA requires the lender or mortgage broker to tell you in writing, when you apply for a loan or within the next three business days, whether it expects that someone else will be servicing your loan (collecting your payments).

What disclosures are specifically required within 3 days of application? ›

When you apply for a mortgage loan, the lender is required to provide you with initial disclosures within three business days of application. Initial disclosures let you know what you can expect in terms of cost, monthly payments, and loan structure.

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