No, you are not required to establish a cut-off time for processing consumer loan payments. However, if you do establish a cut-off time for when payments are received for HELOCs or closed-end residential mortgages, the time must be “reasonable.”  By rule this means that for HELOCs your cut-off time cannot be before 5:00 p.m., and while no cut-off time is prescribed for closed-end residential mortgages, the CFPB suggests that 5:00 p.m. also would be considered a reasonable time for them.

For both HELOCs and closed-end residential mortgages, if you do not specify a cut-off time, you must permit customers to make payments at any location where you conduct business during its normal business hours. Consequently, if you have branches that close at different times or that close before 5:00 p.m., it may be more manageable not to establish a cut-off time. In that event, the default would be the closing time at the branch where the payment is received.

Regardless of whether you establish a cut-off time for receiving payments or rely on the default cut-off time of the close of normal business hours, and regardless of what date you process the payments, you must credit payments made to consumer loan accounts as of the date they are received. In other words, while a payment may be posted after the date the payment was received, the payment must be credited as of the date the payment was received.

As for disclosures of your cut-off times, we believe this may be done in either the note or the monthly statements.

For resources related to our guidance, please see:

• Official Interpretations, Regulation Z, Certain Home Mortgage Transactions, Paragraph 36(c)(1)(iii), Comment 1 (“The servicer may specify reasonable requirements for making payments in writing, such as . . . setting a cut-off hour for payment to be received, or setting different hours for payment by mail and payments made in person; specifying that only checks or money orders should be sent by mail; specifying that payment is to be made in U.S. dollars; or specifying one particular address for receiving payments, such as a post office box. . . .”)

• Official Interpretations, Regulation Z, Certain Home Mortgage Transactions, Paragraph 36(c)(1)(iii), Comment 2 (“Requirements for making payments must be reasonable; it should not be difficult for most consumers to make conforming payments. For example, it would be reasonable to require a cut-off time of 5 p.m. for receipt of a mailed check at the location specified by the servicer for receipt of such check.”)

• Official Interpretations, Regulation Z, Certain Home Mortgage Transactions, Paragraph 36(c)(1)(iii), Comment 3 (“In the absence of specified requirements for making payments, payments may be made at any location where the servicer conducts business; any time during the servicer’s normal business hours; and by cash, money order, draft, or other similar instrument in properly negotiable form, or by electronic fund transfer if the servicer and consumer have so agreed.”)

• Regulation Z, Open-End Credit, 12 CFR 1026.10(b)(1) (“A creditor may specify reasonable requirements for payments that enable most consumers to make conforming payments.”)

• Regulation Z, Open-End Credit, 12 CFR 1026.10(b)(2) (“Reasonable requirements for making payment may include: . . . Setting reasonable cut-off times for payments to be received by mail, by electronic means, by telephone, and in person (except as provided in paragraph (b)(3) of this section), provided that such cut-off times shall be no earlier than 5 p.m. on the payment due date at the location specified by the creditor for the receipt of such payments . . . .”)

• Official Interpretations, Regulation Z, Paragraph 10(b), Comment 4 (“In the absence of specified requirements for making payments (see § 1026.10(b)): (i) Payments may be made at any location where the creditor conducts business. (ii) Payments may be made any time during the creditor’s normal business hours. (iii) Payment may be by cash, money order, draft, or other similar instrument in properly negotiable form, or by electronic fund transfer if the creditor and consumer have so agreed.”)

• Regulation Z, Certain Home Mortgage Transactions, 12 CFR 1026.36(c)(1)(i) (“In connection with a consumer credit transaction secured by a consumer’s principal dwelling: (i) Periodic payments. No servicer shall fail to credit a periodic payment to the consumer’s loan account as of the date of receipt, except when a delay in crediting does not result in any charge to the consumer or in the reporting of negative information to a consumer reporting agency, or except as provided in paragraph (c)(1)(iii) of this section. . . .”)

• Regulation Z, Open-End Credit, 12 CFR 1026.10(a) (“A creditor shall credit a payment to the consumer’s account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge or except as provided in paragraph (b) of this section.”)

• Official Interpretations, Regulation Z, Paragraph 10(b), Comment 1 (“Section 1026.10(a) does not require the creditor to post the payment to the consumer’s account on a particular date; the creditor is only required to credit the payment as of the date of receipt.”)