12 CFR §1026.23 — Right of rescission
Regulation Z §1026.23 governs the consumer's right to rescind closed-end credit transactions secured by the consumer's principal dwelling: notice of right, three-business-day window, delay of creditor's performance, and same-creditor-refi partial exemption.
Verbatim regulatory text
Verbatim provisions from 12 CFR §1026.23 — Right of rescission — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
12 CFR §1026.23(a)(1) — Consumer's right to rescind transactions secured by principal dwelling
(1) In a credit transaction in which a security interest is or will be retained or acquired in a consumer 's principal dwelling , each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, except for transactions described in paragraph (f) of this section. For purposes of this section, the addition to an existing obligation of a security interest in a consumer 's principal dwelling is a transaction. The right of rescission applies only to the addition of the security interest and not the existing obligation . The creditor shall deliver the notice required by paragraph (b) of this section but need not deliver new material disclosures. Delivery of the required notice shall begin the rescission period.
12 CFR §1026.23(a)(3) — Rescission window: midnight of third business day or 3-year backstop
(i) The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last. If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer 's interest in the property, or upon sale of the property, whichever occurs first.
12 CFR §1026.23(b)(1) — Notice of right to rescind: two copies on a separate document
(1) Notice of right to rescind. In a transaction subject to rescission, a creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind (one copy to each if the notice is delivered in electronic form in accordance with the consumer consent and other applicable provisions of the E-Sign Act). The notice shall be on a separate document that identifies the transaction and shall clearly and conspicuously disclose the following:
12 CFR §1026.23(c) — Delay of creditor's performance during rescission period
(c) Delay of creditor's performance. Unless a consumer waives the right of rescission under paragraph (e) of this section, no money shall be disbursed other than in escrow, no services shall be performed and no materials delivered until the rescission period has expired and the creditor is reasonably satisfied that the consumer has not rescinded.
12 CFR §1026.23(f)(2) — Same-creditor refinancing partial exemption from rescission
(2) A refinancing or consolidation by the same creditor of an extension of credit already secured by the consumer 's principal dwelling . The right of rescission shall apply, however, to the extent the new amount financed exceeds the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing or consolidation.
12 CFR §1026.23(b)(1) — Notice of right to rescind: two copies on a separate document — enumerated items (chapeau recall fix)
(i) The retention or acquisition of a security interest in the consumer 's principal dwelling . (ii) The consumer 's right to rescind the transaction. (iii) How to exercise the right to rescind, with a form for that purpose, designating the address of the creditor's place of business. (iv) The effects of rescission, as described in paragraph (d) of this section. (v) The date the rescission period expires.