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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.


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Just want to clarify because there was other information given at a recent conference that stated there was "not one but two definitions of a business day" Waiting period for Loan Estimate and Consumer Receipt of Closing Disclosure defined as all calendar days except Sunday and certain federal holidays. Other being: When providing Loan Estimate to consumer within three business days of application - defined as day on which the creditors offices are open to the public to carry on substantially all functions. The last is what I thought was what was in the final rule. Is the first statement not accurate?

When is the three-day rule going to come into existence? I read somewhere that it would be 08/15/2015, then someone else told us that it was starting in April of 2014.

Karen, you are correct. While it sounds weird, in an effort to aid lenders in compliance with the timing requirements, the final rule contains two separate definitions of “business day.”

Generally, the definition of a business day is “all calendar days except Sundays and legal public holidays”. This is the definition used when counting the three business days prior to closing for providing the Closing Disclosure and the seven business day waiting period between providing of the Loan Estimate closing. See proposed final 12 C.F.R. § 1026.2(a)(6).

The rule has a separate definition of “business day” solely for the requirement that the lender provide the Loan Estimate within three business days of receiving an application. For purposes of this provision only, the term “business day” is defined as “a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.” Below is the entire definition:

(6) Business day means a day on which the creditor's offices are open to the public for carrying on substantially all of its business functions. However, for purposes of rescission under §§ 1026.15 and 1026.23, and for purposes of §§ 1026.19(a)(1)(ii), 1026.19(a)(2), 1026.19(e)(1)(iii)(B), 1026.19(e)(1)(iv), 1026.19(e)(2)(i)(A), 1026.19(e)(4)(ii), 1026.19(f)(1)(ii), 1026.19(f)(1)(iii), 1026.20(e)(5), 1026.31, and 1026.46(d)(4), the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.

Hello Jim. On the first page of the final rule (http://files.consumerfinance.gov/f/201311_cfpb_final-rule_integrated-mortgage-disclosures.pdf), it states that the rule goes into effect Aug. 1, 2015. This is when the industry must start using the new Loan Estimate and Closing Disclosure and begin following the three-day requirement.

Thanks for the quick response. I thought the person (a loan officer, BTW) who told us April was incorrect, but he was adamant.

As to the defining of business days - only the government could actually come up with two different definitions to what used to be a simple item - Monday through Friday except holidays.

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