What are your thoughts on situations where the APR goes down by 1/8 or more from the last disclosure? Would the CD need to be re-disclosed and a waiting period be observed?

Short answer is no. The way this rule works is, and you sort of have to walk a Byzantine maze to get there, there is buried within the depths of Regulation Z a carve out for circumstances in which the APR goes down as a result of the finance charge. This is an important point: If you simply get the APR wrong — in other words, you overdisclosed it — not because you overdisclosed the finance charge used to calculate the APR, but literally you made a mathematical error, then in theory that could cause redisclosure and an additional 3 day waiting period. I’m sure that has happened, but I personally have not seen it happen. A far more common circumstance is where you’ve accidentally included something in the finance charge that shouldn’t have been in there and then when you take it out, the APR goes down. Or you disclosed the correct finance charge but then it simply goes down on the loan, which sometimes happens. In either case, that will not trigger a 3 day waiting period.

Note: This transcript has been edited from the February 2015 TRID webinar for clarity and completeness.

Answered By: Ben Olson