We do not believe that you would have to provide the TIL disclosure or the rescission disclosure to a spouse who is not receiving credit and who does not own the property securing the transaction.

Regulation Z requires that banks provide all the required disclosures to “the consumer.” 12 CFR 1026.5, 1026.17. For purposes of those sections, the regulation defines “consumer” as the “natural person to whom consumer credit is offered or extended.” 12 CFR 1026.2(a)(11). If you do not extend credit to the borrower’s spouse, then you do not have to provide the required disclosures to the spouse.

The Illinois homestead exemption requires that “the individual and his or her spouse” (and any party to a civil union) sign the waiver of homestead of exemption. 735 ILCS 5/12-904.

However, the right of rescission applies only to “each consumer whose ownership interest is or will be subject to the security interest . . . .” 12 CFR 1026.15(a)1026.23(a). For purposes of the right of rescission, the regulation defines “consumer” as “a natural person in whose principal dwelling a security interest is or will be retained or acquired, if that person’s ownership interest in the dwelling is or will be subject to the security interest.” 12 CFR 1026.2(a)(11). In order for a borrower’s spouse of have a right to rescind, the spouse “must at least have an ownership interest in the dwelling that is encumbered by the creditor's security interest, although that person need not be a signatory to the credit agreement.” Comment 2, Official Staff Commentary, 12 CFR 1026.23(a)(1). Therefore, a non-titled spouse in a non-community property state is not required to sign a notice of right to rescission under TILA and Regulation Z.

Further, note that Regulation B prohibits you from requiring a spouse to sign credit documents unless the spouses expressly apply for joint credit. 12 CFR 1002.7(d). There is an exception, however, for documents that spouses must sign under state law to make the property securing the loan “available to satisfy the debt in the event of default” (such as Illinois’s homestead waiver, which must be signed by the spouse). 12 CFR 1002.7(d)(4).