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If an LLC enters into a loan for the purpose of constructing the primary residence for the LLC’s owner, do the TILA-RESPA Integrated Disclosure (TRID) rules apply? – IBA Compliance Connection

IBA Compliance Connection

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If an LLC enters into a loan for the purpose of constructing the primary residence for the LLC’s owner, do the TILA-RESPA Integrated Disclosure (TRID) rules apply?

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No, the TRID rules do not apply to loans made to an entity “other than a natural person.” A loan extended to a business entity, such as an LLC, would be exempt.

For resources related to our guidance, please see:

  • Regulation Z, 12 CFR 1026.3(a)(2) (Regulation Z does not apply to “an extension of credit to other than a natural person . . .”)

  • Regulation Z, 12 CFR 1026.19(e)(1)(f)(1)  (The TRID Loan Estimate and Closing Disclosure requirements apply only to consumers in a “closed-end consumer credit transaction secured by real property . . .”)

  • Regulation Z, 12 CFR 1026.2(a)(12) (“Consumer credit means credit offered or extended to a consumer primarily for personal, family, or household purposes.”)

  • Regulation Z, 12 CFR 1026.2(a)(11) (“Consumer means a cardholder or natural person to whom consumer credit is offered or extended.”)