Record the rescission dates for credit secured by a principal dwelling
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the credit file, record whether a security interest is described as being retained in a consumer's principal dwelling, the date of consummation, the date the rescission notice was delivered, and the date all material disclosures were delivered. Do not decide that the right to rescind exists, and do not decide when it ends.
- What the lawyer must review
- The lawyer decides whether 12 CFR 1026.23 applies and when the right ends. In a credit transaction in which a security interest is or will be retained or acquired in a consumer's principal dwelling, each consumer whose ownership interest is or will be subject to the security interest has the right to rescind, except for transactions described in paragraph (f). Paragraph (f) lists a residential mortgage transaction; a refinancing or consolidation by the same creditor of credit already secured by the principal dwelling, except to the extent the new amount financed exceeds the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing or consolidation; a transaction in which a state agency is a creditor; an advance, other than an initial advance, in a series treated as a single transaction under section 1026.17(c)(6) if the rescission notice and all material disclosures have been given; and a renewal of optional insurance premiums that is not a refinancing under section 1026.20(a)(5). The consumer may rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b), or delivery of all material disclosures, whichever occurs last. If the required notice or material disclosures are not delivered, the right expires three years after consummation, upon transfer of all of the consumer's interest in the property, or upon sale of the property, whichever occurs first. The official commentary's example treats a transaction consummated on Friday, June 1, with the disclosures and notice given on Thursday, May 31, as expiring at midnight on Tuesday, June 5. The definition of business day is in section 1026.2, which was not opened. The eCFR page states the same third-business-day and three-year text. This is not a general right to return a financial product.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.