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Under the upcoming TRID rules, we must provide the Closing Disclosure three business days before “consummation” of the loan, and Regulation Z provides that state law governs when “consummation” occurs. What is the definition of “consummation” under Illinois law? – IBA Compliance Connection

IBA Compliance Connection

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Under the upcoming TRID rules, we must provide the Closing Disclosure three business days before “consummation” of the loan, and Regulation Z provides that state law governs when “consummation” occurs. What is the definition of “consummation” under Illinois law?

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Under Illinois case law, a mortgage loan is consummated on the date of the loan closing. A number of Illinois courts have held that consummation occurs on the date of the loan closing for purposes of the TILA.

For resources related to our guidance, please see below:

  • Personius v. Homeamerican Credit, Inc., 234 F.Supp.2d 817, 820 (N.D. Ill. 2002) (the borrowers “became contractually obligated [for purposes of TILA] on the closing date of their mortgages . . . .”)
  • Jenkins v. Mercantile Mortg. Co., 231 F.Supp.2d 737, 745 (N.D. Ill. 2002) (“a credit transaction is consummated for the purposes of TILA when the plaintiffs become contractually obligated on a credit transaction, in this case, the consummation being the closing of the loan”)
  • Streit v. Fireside Chrysler-Plymouth, Inc., 697 F.2d 193, 196 (7th. Cir. 1983) (the date the borrowers signed the retail installment contract for an auto loan was the date of consummation for purposes of the TILA)
  • Regulation Z, 12 CFR 1026.2(a)(13) (“consummation” means the time that a consumer becomes contractually obligated on a credit transaction)
  • Regulation Z, Official Interpretations, 12 CFR 1026, Paragraph 2(a)(13), Comment 1 (“When a contractual obligation on the consumer’s part is created is a matter to be determined under applicable law; Regulation Z does not make this determination. A contractual commitment agreement, for example, that under applicable law binds the consumer to the credit terms would be consummation.”)