Loan with a right of rescission

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Question:

I have a closed-end consumer 1-4 family refinance with new money being loaned. This loan has a right of rescission. Am I to collect interest on the refi loan to the date of the loan or the day it comes out of rescission?

Answer:

That is a matter of state law and absent any guidance in state law it would be a business decision.

Although Reg. Z does not prohibit accruing interest from the note date most financial institutions do not start the interest accrual until the loan comes out of rescission.