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Would we violate a customer’s privacy rights by providing a copy of the customer’s Closing Disclosure to the seller and the seller’s realtor in advance of the closing (so that they can check it for accuracy)? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Would we violate a customer’s privacy rights by providing a copy of the customer’s Closing Disclosure to the seller and the seller’s realtor in advance of the closing (so that they can check it for accuracy)?

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Yes, we believe it would violate your customer’s privacy rights if your bank were to provide a full Closing Disclosure to the seller, unless your customer agrees to providing this disclosure. Alternatively, the TRID rules provide a modified Closing Disclosure form that redacts certain personal financial information of the buyer for purposes of providing to the seller, which also would resolve any privacy issues.

For resources related to our guidance, please see:

  • Regulation P, 12 CFR 1016.15(a)(1) (“Exceptions to opt out requirements . . . . (1) With the consent or at the direction of the consumer, provided that the consumer has not revoked the consent or direction.”)
  • Regulation Z, 12 CFR 1026.38(t)(5)(vi) (Certain information related to the borrower “may be deleted from the form provided to the seller or a third-party, as illustrated by form H-25(I).”)
  • Regulation Z, Form H-25(I) (Model Form Closing Disclosure for Disclosure Provided to Seller)