Equipment Loans and the Right of Rescission

Answered by:

Question:

We are loaning money on heating and air conditioning equipment in IN, KY, IL, TN, and MO. Are we required to have the consumer sign a 3 day Right of Rescission Agreement. We are not taking a lien on their property. If we do need them to sign, is it legal to have them sign a Waiver to their Right of Rescission so as to the install the equipment immediately?

Answer:

There is no federal law requiring a rescission right in these types of loans. There may, however, be state laws (either in the state(s) where your institution is located or in the states where the equipment will be installed) requiring such. If that is the case, the state law will stipulate whether any waiver of the rescission right is allowed.

First published on BankersOnline.com 10/21/02