Compliance Question of the Week
January 7, 2014
Jan. 7, 2014
When can we permit a member to waive the right of rescission for a loan secured by the member’s principal dwelling?
Right of rescission is almost never waived. In order for the right of rescission to be waived, the member must have a “bona fide personal financial emergency that must be met before the end of the rescission period.” This law is interpreted very strictly, so it really does require an actual emergency situation to qualify. The member’s desire to finish up the paperwork as quickly as possible is not an emergency under this rule.
If there is a bona fide personal emergency, the credit union must receive a dated, written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers that are entitled to rescind.
Questions? Contact the Compliance Hotline: 1.800.546.4465, email@example.com.
Posted in Compliance.