Yes, you may add an additional advance to an existing closed-end loan. The question becomes whether the additional advance would require you to provide a new set of disclosures for the original loan. 

It depends on how the additional advance is structured. If the advance were to satisfy the existing obligation and replace it with a new obligation, then it would be considered a refinancing under Regulation Z, which would trigger the rule’s requirement for a new set of disclosures. But if the new obligation is not replacing the prior obligation, the additional advance would not be considered a refinancing.

Unlike a refinancing, a modification of the loan would not require a new set of disclosures for the original loan. If you make the advance under a modification agreement, by structuring the agreement so that it does not satisfy and replace the existing loan agreement, you will not need to provide a new set of disclosures for the underlying loan (other than what is necessary for the modification agreement).

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.20(a) (A “refinancing” occurs when “an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer.”)

• Regulation Z, Official Interpretations, 12 CFR 1026, Paragraph 20(a), Comment 1 (“The refinancing may involve the consolidation of several existing obligations, disbursement of new money to the consumer or on the consumer’s behalf, or the rescheduling of payments under an existing obligation. In any form, the new obligation must completely replace the prior one.”)

• First Bank & Trust Co. of Illinois v. Hoeper, 2012 WL 6967353, at *10 (2nd Dist. 2012) (“The fact that each modification may have extended new credit to Denten at a different rate does not make them ‘refinances’ pursuant to TILA. As we have noted, a refinancing occurs when an existing obligation is satisfied and replaced by a new obligation and that obligation was undertaken by the same consumer. Jackson v. American Loan Company, Inc., 202 F.3d 911, 912 (7th Cir. 2000). Here, the Fourth and Fifth Modification Agreements did not satisfy Denten’s obligations under the Original Loan and replace them with new obligations because the existing obligation was never satisfied.”)