12 C.F.R. § 226.31

General rules

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(a) Relation to other subparts in this part. The requirements and limitations of this subpart are in addition to and not in lieu of those contained in other subparts of this part.

(b) Form of disclosures. The creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep. The disclosures required by this subpart may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. § 7001 et seq.).

(c) Timing of disclosure—(1) Disclosures for certain closed-end home mortgages. The creditor shall furnish the disclosures required by § 226.32 at least three business days prior to consummation of a mortgage transaction covered by § 226.32.

(i) Change in terms. After complying with paragraph (c)(1) of this section and prior to consummation, if the creditor changes any term that makes the disclosures inaccurate, new disclosures shall be provided in accordance with the requirements of this subpart.

(ii) Telephone disclosures. A creditor may provide new disclosures by telephone if the consumer initiates the change and if, at consummation:

(A) The creditor provides new written disclosures; and

(B) The consumer and creditor sign a statement that the new disclosures were provided by telephone at least three days prior to consummation.

(iii) Consumer's waiver of waiting period before consummation. The consumer may, after receiving the disclosures required by paragraph (c)(1) of this section, modify or waive the three-day waiting period between delivery of those disclosures and consummation if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the waiting period, and bears the signature of all the consumers entitled to the waiting period. Printed forms for this purpose are prohibited, except when creditors are permitted to use printed forms pursuant to § 226.23(e)(2).

(2) Disclosures for reverse mortgages. The creditor shall furnish the disclosures required by § 226.33 at least three business days prior to:

(i) Consummation of a closed-end credit transaction; or

(ii) The first transaction under an open-end credit plan.

(d) Basis of disclosures and use of estimates—(1) Legal Obligation. Disclosures shall reflect the terms of the legal obligation between the parties.

(2) Estimates. If any information necessary for an accurate disclosure is unknown to the creditor, the creditor shall make the disclosure based on the best information reasonably available at the time the disclosure is provided, and shall state clearly that the disclosure is an estimate.

(3) Per-diem interest. For a transaction in which a portion of the interest is determined on a per-diem basis and collected at consummation, any disclosure affected by the per-diem interest shall be considered accurate if the disclosure is based on the information known to the creditor at the time that the disclosure documents are prepared.

(e) Multiple creditors; multiple consumers. If a transaction involves more than one creditor, only one set of disclosures shall be given and the creditors shall agree among themselves which creditor must comply with the requirements that this part imposes on any or all of them. If there is more than one consumer, the disclosures may be made to any consumer who is primarily liable on the obligation. If the transaction is rescindable under § 226.15 or § 226.23, however, the disclosures shall be made to each consumer who has the right to rescind.

(f) Effect of subsequent events. If a disclosure becomes inaccurate because of an event that occurs after the creditor delivers the required disclosures, the inaccuracy is not a violation of Regulation Z (12 CFR part 226), although new disclosures may be required for mortgages covered by § 226.32 under paragraph (c) of this section, § 226.9(c), § 226.19, or § 226.20.

(g) Accuracy of annual percentage rate. For purposes of § 226.32, the annual percentage rate shall be considered accurate, and may be used in determining whether a transaction is covered by § 226.32, if it is accurate according to the requirements and within the tolerances under § 226.22. The finance charge tolerances for rescission under § 226.23(g) or (h) shall not apply for this purpose.

[Reg. Z, 60 FR 15471, Mar. 24, 1995, as amended at 60 FR 29969, June 7, 1995; 61 FR 49247, Sept. 19, 1996; 66 FR 17339, Mar. 30, 2001; 72 FR 63475, Nov. 9, 2007]

Notes of Decisions

Cited in 10 cases, 2003–2013 · leading case: Williams v. BankOne, National Ass'n (In Re Williams)

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Williams v. BankOne, National Ass'n (In Re Williams) (2003) paeb · cites it 2× “§ 16S9(a)-(b); Subpart E of Regulation Z, 12 C.F.R. §§ 226.31 — 226.32. These pre-closing disclosures are referred to as “pre-closing HOEPA disclosures” or “Section 32 disclosures.”

In Re Katz (2009) del · cites it 4× “The Respondent shall fully cooperate with the ODC in its efforts to monitor his compliance with this Opinion.”

Webster v. Centex Home Equity Corp. (In Re Webster) (2003) okwb “§ 1639 (a)(1); 12 C.F.R. § 226.31 (a). 2. A mortgage subject to such additional disclosures is one resulting from a “consumer credit transaction that is secured by the consumer’s principal dwelling” for a purpose other than to finance the acquisition or initial construction of…”

O'Brien v. Cleveland (In Re O'Brien) (2010) njb “§ 1639 (added to TILA in 1994); see also 12 C.F.R. §§ 226.31 , 226.32, 336.34 (incorporating HOEPA into Regulation Z).”

Spradlin v. Inez Deposit Bank (2003) ca6 “See 12 C.F.R. § 226.31 (c)(1) (“Regulation Z”).”

In re a Member of the Bar of the Supreme Court of the State: Katz (2009) del · cites it 4× “The Respondent shall fully cooperate with the ODC in its efforts to monitor his compliance with this Opinion.”

Jones v. Rees-Max, LLC (2007) mnd “§§ 1602 , 1638, 1639 and 1641; 12 C.F.R. §§ 226.31 and 226.32. Because of these violations, the Joneses argue that they have a continuing right to rescind the transaction.”

L'Esperance v. HSBC Consumer Lending (2012) nhd · cites it 4× “§§ 1639 (a), ( c ) , ( d ) , and ( h ) ; 12 C.F.R. §§ 226.31 (c)(1)-(2); and 12 C.”

Mary L. Sparks v. James E. Dillingham and James E. Dillingham v. Prestige Title, LLC (2013) tennctapp “not apply when the payment schedule is adjusted to the seasonal or irregular income of a borrower; (d) § 45-20-103(16) A lender shall not make a high-cost home loan unless the lender has given the following written notice, in at least twelve (12) point bold type, to the…”

Bordetsky v. Charron (2011) mesuperct “See Regulation Z, 12 C.F.R. § 226.31 (b). The HOEPA Disclosures, which Bordetsky made on the dates of the closings of the Loans, did include all of the high-rate, high-fee required disclosures.”

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