When Does the Three-day Rule Start to Run?
According to the Consumer Financial Protection Bureau’s final rule for integrated mortgage disclosures, the borrower must RECEIVE their Closing Disclosure at least three business days prior to the date of consummation of the transaction. This means that if the closing is set for Thursday, the Closing Disclosure can be hand delivered on Monday. You could also deliver the disclosure by courier or other shipping or postal service so long as you get a signature from the borrower showing receipt on Monday. If a company does not use a service that provides evidence that the disclosure was received on Monday (ie: US Postal Service first class mail), then it must send the disclosure by the prior Thursday.
Some quick definitions can be helpful when understanding this rule. First, the starting point for determining when the three-day period starts is the day of consummation. Consummation is the day the consumer becomes contractually obligated on the loan (i.e., the day they sign the note). This is typically the same day as closing (12 C.F.R. §§ 1026.2(a)(13) & 1026.38(a)(3)(ii)). Once you have the right starting point then you need to count backwards. The three-day rule requires the counting of “business days,” which are “a day on which the creditor’s offices are open to the public for substantially all of its business functions.” (12 C.F.R. § 1026.2(a)(6)). It is not a 72-hour requirement, but rather a day requirement so you do not need to know the time that closing will take place.
Lastly, while the examples the CFPB provides in the rule all focus on physical delivery of the disclosure, electronic delivery is allowed in accordance with the E-SIGN or Uniform Electronic Transaction Act laws. The timing requirements are the same as for physical delivery and would require obtaining some evidence of receipt (i.e., an email confirmation, system log or other indicia) or complying with the mailbox rule for presuming receipt three days after placing the documents in the mail.
For more information about the integrated disclosures, go to www.alta.org/cfpb.