The Consumer Financial Protection Bureau’s final rule for the integrated mortgage disclosures says the creditor must provide the Closing Disclosure to the borrower three days prior to the consummation of the transaction.
This may cause issues in the settlement industry as consummation and closing mean different things in different places. Consummation is not same as closing or settlement. (See page 51 of the CFPB's "Small Entity Compliance Guide" for the bureau's discussion on consummation.)
Consummation is the date that a consumer becomes contractually obligated to the creditor on the loan (i.e., the day they sign the note). This is not when the consumer becomes contractually obligated to a seller on a real estate transaction.
The point in time when a consumer becomes contractually obligated to the creditor on the loan depends on applicable state law (§ 1026.2(a)(13) and Comment 2(a)(13) 1). For states that are escrow states, this could be a different date than the closing.
According to the CFPB, creditors and settlement agents should verify the applicable state laws to determine when consummation will occur, and make sure delivery of the Closing Disclosure occurs at least three business days before this event.