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My bank made a consumer loan that was subject to a right of rescission. The rescission period ended Friday at midnight. May the loan proceeds be disbursed on Saturday or must the borrower wait until the next business day?

My bank made a consumer loan secured by a dwelling. As such, the loan was subject to a right of rescission under Regulation Z. The rescission period ended Friday at midnight. Saturday is not a business day for our bank, as offices are not open to the public for carrying on substantially all of our business functions. May the loan proceeds be disbursed on Saturday (e.g., the borrower wishes to come into a branch and pick up the loan disbursement check), or must the borrower wait until the next business day?

The bank may disburse the funds on Saturday, as the rescission period ended at midnight on Friday. The primary issue is whether the creditor is reasonably satisfied that the consumer has not rescinded. The creditor may satisfy this requirement, as indicated in Comment 4.i to §1026.23(c), either by "waiting a reasonable time after expiration of the rescission period to allow for delivery of a mailed notice" or by "obtaining a written statement from the consumer that the right has not been exercised." Also, note that the bank must receive assurance from all consumers who have the right to rescind that they have not exercised their right (Comment 4.ii to §1026.23(c)). (March 2020)

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