[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR226.31]

[Page 294-296]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 226_TRUTH IN LENDING (REGULATION Z)--Table of Contents
 
     Subpart E_Special Rules for Certain Home Mortgage Transactions
 
Sec.  226.31  General rules.

    Source: Reg. Z, 60 FR 15471, Mar. 24, 1995, unless otherwise noted.


    (a) Relation to other subparts in this part. The requirements and 
limitations of this subpart are in addition to and not in lieu of those 
contained in other subparts of this part.
    (b) Form of disclosures. (1) General. The creditor shall make the 
disclosures required by this subpart clearly and

[[Page 295]]

conspicuously in writing, in a form that the consumer may keep.
    (2) Electronic communication. For rules governing the electronic 
delivery of disclosures, including a definition of electronic 
communication, see Sec.  226.36.
    (c) Timing of disclosure--(1) Disclosures for certain closed-end 
home mortgages. The creditor shall furnish the disclosures required by 
Sec.  226.32 at least three business days prior to consummation of a 
mortgage transaction covered by Sec.  226.32.
    (i) Change in terms. After complying with paragraph (c)(1) of this 
section and prior to consummation, if the creditor changes any term that 
makes the disclosures inaccurate, new disclosures shall be provided in 
accordance with the requirements of this subpart.
    (ii) Telephone disclosures. A creditor may provide new disclosures 
by telephone if the consumer initiates the change and if, at 
consummation:
    (A) The creditor provides new written disclosures; and
    (B) The consumer and creditor sign a statement that the new 
disclosures were provided by telephone at least three days prior to 
consummation.
    (iii) Consumer's waiver of waiting period before consummation. The 
consumer may, after receiving the disclosures required by paragraph 
(c)(1) of this section, modify or waive the three-day waiting period 
between delivery of those disclosures and consummation if the consumer 
determines that the extension of credit is needed to meet a bona fide 
personal financial emergency. To modify or waive the right, the consumer 
shall give the creditor a dated written statement that describes the 
emergency, specifically modifies or waives the waiting period, and bears 
the signature of all the consumers entitled to the waiting period. 
Printed forms for this purpose are prohibited, except when creditors are 
permitted to use printed forms pursuant to Sec.  226.23(e)(2).
    (2) Disclosures for reverse mortgages. The creditor shall furnish 
the disclosures required by Sec.  226.33 at least three business days 
prior to:
    (i) Consummation of a closed-end credit transaction; or
    (ii) The first transaction under an open-end credit plan.
    (d) Basis of disclosures and use of estimates--(1) Legal Obligation. 
Disclosures shall reflect the terms of the legal obligation between the 
parties.
    (2) Estimates. If any information necessary for an accurate 
disclosure is unknown to the creditor, the creditor shall make the 
disclosure based on the best information reasonably available at the 
time the disclosure is provided, and shall state clearly that the 
disclosure is an estimate.
    (3) Per-diem interest. For a transaction in which a portion of the 
interest is determined on a per-diem basis and collected at 
consummation, any disclosure affected by the per-diem interest shall be 
considered accurate if the disclosure is based on the information known 
to the creditor at the time that the disclosure documents are prepared.
    (e) Multiple creditors; multiple consumers. If a transaction 
involves more than one creditor, only one set of disclosures shall be 
given and the creditors shall agree among themselves which creditor must 
comply with the requirements that this part imposes on any or all of 
them. If there is more than one consumer, the disclosures may be made to 
any consumer who is primarily liable on the obligation. If the 
transaction is rescindable under Sec.  226.15 or Sec.  226.23, however, 
the disclosures shall be made to each consumer who has the right to 
rescind.
    (f) Effect of subsequent events. If a disclosure becomes inaccurate 
because of an event that occurs after the creditor delivers the required 
disclosures, the inaccuracy is not a violation of Regulation Z (12 CFR 
part 226), although new disclosures may be required for mortgages 
covered by Sec.  226.32 under paragraph (c) of this section, Sec.  
226.9(c), Sec.  226.19, or Sec.  226.20.
    (g) Accuracy of annual percentage rate. For purposes of Sec.  
226.32, the annual percentage rate shall be considered accurate, and may 
be used in determining whether a transaction is covered by Sec.  226.32, 
if it is accurate according to the requirements and within the 
tolerances under Sec.  226.22. The finance charge tolerances for 
rescission under

[[Page 296]]

Sec.  226.23(g) or (h) shall not apply for this purpose.

[Reg. Z, 60 FR 15471, Mar. 24, 1995, as amended at 60 FR 29969, June 7, 
1995; 61 FR 49247, Sept. 19, 1996; 66 FR 17339, Mar. 30, 2001]