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Providing The Right Of Rescission Notice After Disbursement

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Question: 
If the rescission notice is not provided or the threeday rescission period is incorrect, does providing the notice after disbursement of loan proceeds eliminate the threeyear rescission period as provided by Reg Z?
Answer: 

Yes, if that is the only missing part of the material disclosures, because you have now triggered what is last.

12 CFR Section 226.23 Right of rescission.

(3) The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, 48 whichever occurs last.

That may not cure all the problems, but you should be reduced from what is remaining on the 3years, to just 3days.

First published on BankersOnline.com 7/15/02

First published on 07/15/2002

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