Supplement I to 12 CFR Part 1026 — Official Bureau Interpretations (Regulation Z Commentary, TRID-Relevant Sections)
Supplement I to 12 CFR Part 1026 is the CFPB's official staff commentary on Regulation Z. This register captures the most operationally-load-bearing commentary interpreting the TRID integrated-disclosure sections only: §1026.18 (scope/applicability), §1026.19(e)/(f)/(g) (LE/CD timing, good-faith tolerances, settlement- booklet), §1026.37 (LE content), and §1026.38 (CD content). Each obligation cites the verbatim comment text and identifies the parent rule it interprets via the `interprets` field.
Verbatim regulatory text
Verbatim provisions from Supplement I to 12 CFR Part 1026 — Official Bureau Interpretations (Regulation Z Commentary, TRID-Relevant Sections) — 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.
Supplement I — Comment 18-3.i: §1026.18 scope — excludes TRID-covered loans
3. Scope of coverage. i. Section 1026.18 applies to closed-end consumer credit transactions, other than transactions that are subject to § 1026.19(e) and (f) . Section 1026.19(e) and (f) applies to closed-end consumer credit transactions that are secured by real property or a cooperative unit, other than reverse mortgages subject to § 1026.33 . Accordingly, the disclosures required by § 1026.18 apply only to closed-end consumer credit transactions that are:
Supplement I — Comment 19(e)(1)(ii)-1: Mortgage broker responsibility for the LE
1. Mortgage broker responsibilities. Section 1026.19(e)(1)(ii)(A) provides that if a mortgage broker receives a consumer's application, either the creditor or the mortgage broker must provide the consumer with the disclosures required under § 1026.19(e)(1)(i) in accordance with § 1026.19(e)(1)(iii) . Section 1026.19(e)(1)(ii)(A) also provides that if the mortgage broker provides the required disclosures, it must comply with all relevant requirements of § 1026.19(e) .
Supplement I — Comment 19(e)(1)(ii)-2: Creditor remains responsible when broker issues LE
2. Creditor responsibilities. If a mortgage broker issues any disclosure required under § 1026.19(e) in the creditor's place, the creditor remains responsible under § 1026.19(e) for ensuring that the requirements of § 1026.19(e) have been satisfied. For example, if a mortgage broker receives a consumer's application and provides the consumer with the disclosures required under § 1026.19(e)(1)(i) , the creditor does not satisfy the requirements of § 1026.19(e)(1)(i) if it provides duplicative disclosures to the consumer. In the same example, even if the broker provides an erroneous disclosure, the creditor is responsible and may not issue a revised disclosure correcting the error. The creditor is expected to maintain communication with the broker to ensure that the broker is acting in place of the creditor.
Supplement I — Comment 19(e)(1)(iii)-1: LE 3-business-day timing
1. Timing and use of estimates. The disclosures required by § 1026.19(e)(1)(i) must be delivered not later than three business days after the creditor receives the consumer's application. For example, if an application is received on Monday, the creditor satisfies this requirement by either hand delivering the disclosures on or before Thursday, or placing them in the mail on or before Thursday, assuming each weekday is a business day. For purposes of § 1026.19(e)(1)(iii)(A) , the term “business day” means a day on which the creditor's offices are open to the public for carrying out substantially all of its business functions. See § 1026.2(a)(6) .
Supplement I — Comment 19(e)(1)(iii)-2: 7-business-day pre-consummation waiting period
2. Waiting period. The seven-business-day waiting period begins when the creditor delivers the disclosures or places them in the mail, not when the consumer receives or is considered to have received the disclosures. For example, if a creditor delivers the early disclosures to the consumer in person or places them in the mail on Monday, June 1, consummation may occur on or after Tuesday, June 9, the seventh business day following delivery or mailing of the early disclosures, because, for the purposes of § 1026.19(e)(1)(iii)(B) , Saturday is a business day, pursuant to § 1026.2(a)(6) .
Supplement I — Comment 19(e)(1)(vi)-1: When the creditor permits the consumer to shop
1. Permission to shop. Section 1026.19(e)(1)(vi)(A) permits creditors to impose reasonable requirements regarding the qualifications of the provider. For example, the creditor may require that a settlement agent chosen by the consumer must be appropriately licensed in the relevant jurisdiction. In contrast, a creditor does not permit a consumer to shop for purposes of § 1026.19(e)(1)(vi) if the creditor requires the consumer to choose a provider from a list provided by the creditor. Whether the creditor permits the consumer to shop consistent with § 1026.19(e)(1)(vi)(A) is determined based on all the relevant facts and circumstances.
Supplement I — Comment 19(e)(2)(i)(A)-1: Pre-LE fee restriction
1. Fees restricted. A creditor or other person may not impose any fee, such as for an application, appraisal, or underwriting, until the consumer has received the disclosures required by § 1026.19(e)(1)(i) and indicated an intent to proceed with the transaction. The only exception to the fee restriction allows the creditor or other person to impose a bona fide and reasonable fee for obtaining a consumer's credit report, pursuant to § 1026.19(e)(2)(i)(B) .
Supplement I — Comment 19(e)(2)(i)(A)-5: "Imposed by" means requiring payment method
5. Fees “imposed by” a person. For purposes of § 1026.19(e) , a fee is “imposed by” a person if the person requires a consumer to provide a method for payment, even if the payment is not made at that time. For example, if a creditor or other person requires the consumer to provide a $500 check to pay for a “processing fee” before the consumer receives the disclosures required by § 1026.19(e)(1)(i) , the creditor or other person does not comply with § 1026.19(e)(2)(i) , even if the creditor or other person had stated that the check will not be cashed until after the disclosures required by § 1026.19(e)(1)(i) are received by the consumer and waited until after the consumer subsequently indicated an intent to proceed to cash the check.
Supplement I — Comment 19(e)(2)(iii)-1: No verification-document requirement pre-LE
1. Requirements. The creditor or other person may collect from the consumer any information that it requires prior to providing the early disclosures before or at the same time as collecting the information listed in § 1026.2(a)(3)(ii) . However, the creditor or other person is not permitted to require, before providing the disclosures required by § 1026.19(e)(1)(i) , that the consumer submit documentation to verify the information collected from the consumer.
Supplement I — Comment 19(e)(3)(i)-1: General rule — zero tolerance for fees subject to §1026.19(e)(3)(i)
1. Requirement. Section 1026.19(e)(3)(i) provides the general rule that an estimated closing cost disclosed under § 1026.19(e) is not in good faith if the charge paid by or imposed on the consumer exceeds the amount originally disclosed under § 1026.19(e)(1)(i) . Although § 1026.19(e)(3)(ii) and (iii) provide exceptions to the general rule, the charges that are generally subject to § 1026.19(e)(3)(i) include, but are not limited to, the following:
Supplement I — Comment 19(e)(3)(i)-5: Lender credits — decrease in actual credit = tolerance violation
The actual total amount of lender credits, whether specific or non-specific, provided by the creditor that is less than the estimated “lender credits” identified in § 1026.37(g)(6)(ii) and disclosed pursuant to § 1026.19(e) is an increased charge to the consumer for purposes of determining good faith under § 1026.19(e)(3)(i) .
Supplement I — Comment 19(e)(3)(ii)-2: 10% tolerance — aggregate basis
2. Aggregate increase limited to ten percent. Under § 1026.19(e)(3)(ii)(A) , whether an individual estimated charge subject to § 1026.19(e)(3)(ii) is in good faith depends on whether the sum of all charges subject to § 1026.19(e)(3)(ii) increases by more than 10 percent, regardless of whether a particular charge increases by more than 10 percent. This is true even if an individual charge was omitted from the estimate provided under § 1026.19(e)(1)(i) and then imposed at consummation.
Supplement I — Comment 19(e)(3)(iv)-2: Revised disclosures only for charges actually increased by the trigger event
2. Actual increase. A creditor may determine good faith under § 1026.19(e)(3)(i) and (ii) based on the increased charges reflected on revised disclosures only to the extent that the reason for revision, as identified in § 1026.19(e)(3)(iv)(A) through (F), actually increased the particular charge. For example, if a consumer requests a rate lock extension, then the revised disclosures on which a creditor relies for purposes of determining good faith under § 1026.19(e)(3)(i) may reflect a new rate lock extension fee, but the fee may be no more than the rate lock extension fee charged by the creditor in its usual course of business, and the creditor may not rely on changes to other charges unrelated to the rate lock extension for purposes of determining good faith under § 1026.19(e)(3)(i) and (ii) .
Supplement I — Comment 19(e)(3)(iv)-3: Documentation requirement for revised disclosures
3. Documentation requirement. In order to comply with § 1026.25 , creditors must retain records demonstrating compliance with the requirements of § 1026.19(e) . For example, if revised disclosures are provided because of a changed circumstance under § 1026.19(e)(3)(iv)(A) affecting settlement costs, the creditor must be able to show compliance with § 1026.19(e) by documenting the original estimate of the cost at issue, explaining the reason for revision and how it affected settlement costs, showing that the corrected disclosure increased the estimate only to the extent that the reason for revision actually increased the cost, and showing that the timing requirements of § 1026.19(e)(4) were satisfied.
Supplement I — Comment 19(f)(1)(ii)-1: CD 3-business-day pre-consummation receipt
1. Timing. Except as provided in § 1026.19(f)(1)(ii)(B) , (f)(2)(i), (f)(2)(iii), (f)(2)(iv), and (f)(2)(v), the disclosures required by § 1026.19(f)(1)(i) must be received by the consumer no later than three business days before consummation. For example, if consummation is scheduled for Thursday, the creditor satisfies this requirement by hand delivering the disclosures on Monday, assuming each weekday is a business day. For purposes of § 1026.19(f)(1)(ii) , the term “business day” means all calendar days except Sundays and legal public holidays referred to in § 1026.2(a)(6) . See comment 2(a)(6)-2.
Supplement I — Comment 19(f)(1)(iii)-1: 3-day mailbox-rule receipt presumption
1. Mail delivery. Section 1026.19(f)(1)(iii) provides that, if any disclosures required under § 1026.19(f)(1)(i) are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. If the creditor delivers the disclosures required under § 1026.19(f)(1)(i) in person, consummation may occur any time on the third business day following delivery. If the creditor provides the disclosures by mail, the consumer is considered to have received them three business days after they are placed in the mail, for purposes of determining when the three-business-day waiting period required under § 1026.19(f)(1)(ii)(A) begins.
Supplement I — Comment 19(f)(2)(ii)-1: Three triggers that restart the 3-day CD waiting period
1. Conditions for corrected disclosures. Pursuant to § 1026.19(f)(2)(ii) , if, at the time of consummation, the annual percentage rate becomes inaccurate, the loan product changes, or a prepayment penalty is added to the transaction, the creditor must provide corrected disclosures with all changed terms so that the consumer receives them not later than the third business day before consummation.
Supplement I — Comment 19(f)(2)(v)-1: 60-day tolerance refund mechanism
1. Requirements. Section 1026.19(f)(2)(v) provides that, if amounts paid at consummation exceed the amounts specified under § 1026.19(e)(3)(i) or (ii), the creditor does not violate § 1026.19(e)(1)(i) if the creditor refunds the excess to the consumer no later than 60 days after consummation, and the creditor does not violate § 1026.19(f)(1)(i) if the creditor delivers or places in the mail disclosures corrected to reflect the refund of such excess no later than 60 days after consummation.
Supplement I — Comment 19(f)(3)(i)-1: CD charges must not exceed actual amounts received by service provider
1. Requirements. Section 1026.19(f)(3)(i) provides the general rule that the amount imposed on the consumer for any settlement service shall not exceed the amount actually received by the settlement service provider for that service. Except as otherwise provided in § 1026.19(f)(3)(ii) , a creditor violates § 1026.19(f)(3)(i) if the amount imposed upon the consumer exceeds the amount actually received by the service provider for that service.
Supplement I — Comment 19(g)(1)-3: Special information booklet delivery within 3 business days of application
3. Consumer's application. Section 1026.19(g)(1)(i) requires that the creditor deliver or place in the mail the special information booklet not later than three business days after the consumer's application is received. “Application” is defined in § 1026.2(a)(3)(ii) . The creditor need not provide the booklet under § 1026.19(g)(1)(i) when it denies an application or if the consumer withdraws the application before the end of the three-business-day period under § 1026.19(e)(1)(iii)(A) . See comment 19(e)(1)(iii)-3 for additional guidance on denied or withdrawn applications.
Supplement I — Comment 37(a)(4)-1: "Date issued" on the LE = mailing/delivery date
1. Applicable date. Section 1026.37(a)(4) requires disclosure of the date the creditor mails or delivers the Loan Estimate to the consumer. The creditor's method of delivery does not affect the date issued. For example, if the creditor hand delivers the Loan Estimate to the consumer on August 14, or if the creditor places the Loan Estimate in the mail on August 14, the date disclosed under § 1026.37(a)(4) is August 14.
Supplement I — Comment 37(a)(7)-1: Refinance estimated property value
1. Estimated property value. In transactions where there is no seller, such as in a refinancing, § 1026.37(a)(7)(ii) requires the creditor to disclose the estimated value of the property identified in § 1026.37(a)(6) based on the best information reasonably available to the creditor at the time the disclosure is provided to the consumer, which may include, at the creditor's option, the estimated value of the improvements to be made on the property in transactions involving construction. The creditor may use the estimate provided by the consumer at application unless it has performed its own estimate of the property value by the time the disclosure is provided to the consumer, in which case the creditor must use its own estimate.
Supplement I — Comment 37(a)(12)-1: Loan ID # must be unique
1. Unique identifier. Section 1026.37(a)(12) requires that the creditor disclose a loan identification number that may be used by the creditor, consumer, and other parties to identify the transaction, labeled as “Loan ID # .” The loan identification number is determined by the creditor, which number may contain any alpha-numeric characters. Because the number must allow for the identification of the particular credit transaction under § 1026.37(a)(12) , a creditor must use a unique loan identification number, i.e., the creditor may not use the same loan identification number for different, but related, loan transactions (such as different loans to the same borrower). Where a creditor issues a revised Loan Estimate for a transaction, the loan identification number must be sufficient to enable identification of the transaction pursuant to § 1026.37(a)(12) .
Supplement I — Comment 38-3: CD must reflect actual terms
3. Good faith requirement. The disclosures required by § 1026.38 are required to reflect the actual terms of the legal obligation between the parties, and the actual costs associated with the settlement of the transaction. Creditors and settlement agents may estimate disclosures as provided pursuant to § 1026.19(f)(1)(i) when the actual term or cost is unknown at the time the disclosures are made.
Supplement I — Comment 38(a)(5)(v)-1: CD Loan ID must enable LE↔CD identification
1. Same identification number as Loan Estimate. The loan identification number disclosed pursuant to § 1026.38(a)(5)(v) must be one that enables the creditor, consumer, and other parties to identify the transaction as the same transaction disclosed on the Loan Estimate. The loan identification number may contain any alpha-numeric characters. If a creditor uses the same loan identification number on several revised Loan Estimates to the consumer, but adds after such number a hyphen and a number to denote the number of revised Loan Estimates in sequence, the creditor must disclose the loan identification number before such hyphen on the Closing Disclosure to identify the transaction as the same for which the initial and revised Loan Estimates were provided.
Supplement I — Comment 38(c)(1)-1: Escrow-analysis-driven CD escrow may differ from LE
1. Escrow account analysis. The amount of estimated escrow payments disclosed on the Closing Disclosure is accurate if it differs from the estimated escrow payment disclosed on the Loan Estimate because of the escrow account analysis described in Regulation X, 12 CFR 1024.17 .
Supplement I — Comment 19(e)(3)(i)-1: General rule — zero tolerance for fees subject to §1026.19(e)(3)(i) — enumerated items (chapeau recall fix)
i. Fees paid to the creditor. ii. Fees paid to a mortgage broker. iii. Fees paid to an affiliate of the creditor or a mortgage broker. iv. Fees paid to an unaffiliated third party if the creditor did not permit the consumer to shop for a third party service provider for a settlement service. v. Transfer taxes.