IBA Compliance Connection

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After issuing a Closing Disclosure (CD), if the amount needed to pay off an existing mortgage loan changes — lowering the amount of cash due from the borrower at closing — we would revise the CD at closing to reflect the new payoff amount. When this occurs, should we revise the issue date of the CD to be the same as the closing date?

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Yes, if you revise a CD at closing to reflect an updated payoff amount, you should revise the issue date of the CD to reflect the closing date.

Under Regulation Z, if the disclosures provided in the CD become inaccurate before consummation, “the creditor shall provide corrected disclosures reflecting any changed terms to the consumer so that the consumer receives the corrected disclosures at or before consummation.” The official commentary to Regulation Z also provides that the “date issued” listed on a CD should reflect the date it is delivered to the consumer — either by hand or mail delivery.

In this case, where you are correcting the CD at closing and delivering it to the consumer at that time, we believe that the issue date should reflect the date of hand delivery to the consumer — i.e., the closing date.

For resources related to our guidance, please see:

  • Regulation Z, 12 CFR 1026.19(f)(2)(i) (“Except as provided in paragraph (f)(2)(ii), if the disclosures provided under paragraph (f)(1)(i) of this section become inaccurate before consummation, the creditor shall provide corrected disclosures reflecting any changed terms to the consumer so that the consumer receives the corrected disclosures at or before consummation.”)
  • Regulation Z, 12 CFR 1026.19(f)(1)(i) (“In a transaction subject to paragraph (e)(1)(i) of this section, the creditor shall provide the consumer with the disclosures required under § 1026.38 reflecting the actual terms of the transaction.”)
  • Regulation Z, 12 CFR 1026.38(a)(3)(i), Content of Closing Disclosure (“For each transaction subject to § 1026.19(f), the creditor shall disclose the information in this section: . . . Under the heading ‘Closing Information’: (i) Date issued. The date the disclosures required by this section are delivered to the consumer, labeled ‘Date Issued.’”)
  • Regulation Z, Official Interpretations, Paragraph 38(a)(3), Comment 1 (“For general guidance on identifying the date issued for the Closing Disclosure, see the commentary to § 1026.37(a)(4).”)
  • Regulation Z, Official Interpretations, Paragraph 37(a)(4), Comment 1 (“Section 1026.37(a)(4) requires disclosure of the date the creditor mails or delivers the Loan Estimate to the consumer. The creditor’s method of delivery does not affect the date issued. For example, if the creditor hand delivers the Loan Estimate to the consumer on August 14, or if the creditor places the Loan Estimate in the mail on August 14, the date disclosed under § 1026.37(a)(4) is August 14.”)