A closed-end refinance secured by the borrower’s principal dwelling is subject to Regulation Z rescission, with no exemption or waiver. Consummation and receipt of all material disclosures occur Tuesday, March 3. The required rescission notice arrives Thursday, March 5. No legal public holiday intervenes. When does the rescission period end?
Correct Answer
B) Midnight on Monday 9 March, 3 business days after the last of the events
B. Midnight on Monday, March 9. The notice arrives last, so Thursday is the triggering day rather than Tuesday. The next three business days are Friday, Saturday and Monday; Sunday is excluded. Scope and exceptions: Do not assume every refinance or every property owned by the borrower is rescindable. Coverage is explicit here. Source: 1026.23(a)(1), (a)(3)(i); comment 23(a)(3)-1 — https://www.consumerfinance.gov/rules-policy/regulations/1026/23/
Why This Is the Correct Answer
B. Midnight on Monday, March 9. The notice arrives last, so Thursday is the triggering day rather than Tuesday. The next three business days are Friday, Saturday and Monday; Sunday is excluded. Scope and exceptions: Do not assume every refinance or every property owned by the borrower is rescindable. Coverage is explicit here.
Why the Other Options Are Wrong
Option A: Midnight on Tuesday 10 March, a full week after the loan was consummated
It substitutes a calendar week for the applicable count.
Option C: Midnight on Thursday 5 March, once the notice has finally been handed over
Receipt starts the period rather than ending it.
Option D: Midnight on Friday 6 March, 3 business days after consummation itself
It incorrectly starts from consummation despite the later notice.
Exam Tip
Latest required event first; then count three business days.
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