Waiving Recission Right

Consumers can waive their right to rescind in situations when credit is needed “to meet a bona fide personal financial emergency,” 12 CFR Section 226.23(e). In order to waive the right to rescind, the consumer must give the creditor a written and dated statement, describing the emergency, specifically waiving the right to rescind, and including the signatures of all consumers entitled to exercise a right to rescind.

The lender may choose not to grant the waiver due to the risk that the situation posed by the borrower may not meet the statutory requirement of a bona fide emergency. The decision to grant a waiver lies solely with the lender. They cannot be compelled to grant the request.

Originators should discourage the borrower from asking for a waiver. If an urgent situation exists steps can be taken early in the lending process to ensure that funds are available when needed.