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Buddy, I know that we have to provide 2 copies of the notice of the right to rescind to each person who has the ability to rescind a loan secured by the principal dwelling. If we provide required disclosures electronically, do we need to send 2 copies?

July 2016

Answer:

According to the Commentary to Regulation Z, if the credit union is following E-Sign in providing electronic disclosures, only 1 copy of the notice of the right to rescind has to be sent to each party who is entitled to rescind.

 

Here is the relevant commentary section for open-end loans, Section 1026.15(b):

 

15(b) Notice of Right To Rescind

1. Who receives notice. Each consumer entitled to rescind must be given two copies of the rescission notice and the material disclosures.In a transaction involving joint owners, both of whom are entitled to rescind, both must receive the notice of the right to rescind and disclosures. For example, if both spouses are entitled to rescind a transaction, each must receive two copies of the rescission notice (one copy to each if the notice is provided in electronic form in accordance with the consumer consent and other applicable provisions of the E-Sign Act) and one copy of the disclosures.

 

Here is the relevant commentary for closed-end loans, Section 1026.23(b):

 

23(b)(1) Notice of Right To Rescind

1. Who receives notice. Each consumer entitled to rescind must be given two copies of the rescission notice and the material disclosures. In a transaction involving joint owners, both of whom are entitled to rescind, both must receive the notice of the right to rescind and disclosures. For example, if both spouses are entitled to rescind a transaction, each must receive two copies of the rescission notice (one copy to each if the notice is provided in electronic form in accordance with the consumer consent and other applicable provisions of the E-Sign Act) and one copy of the disclosures.