Which law ensures that some borrowers have the right of rescission for three business days after a loan contract is signed?

The law that ensures some borrowers have the right of rescission for three business days after a loan contract is signed is Regulation Z. This regulation is part of the Truth in Lending Act (TILA) and specifically addresses consumer protection in lending.

The right of rescission allows borrowers to cancel certain types of loan agreements within three business days, thereby providing an essential protection that enables consumers to reconsider their decision after the loan is finalized. This is particularly relevant for certain loans secured by a borrower's primary residence, such as refinances and home equity loans. Regulation Z mandates that lenders inform borrowers of this right, making it a vital component of consumer rights in mortgage lending.

This process ensures that consumers are fully aware of their obligations and the implications of the loan they are entering into, giving them a crucial period to evaluate their decisions.