According to the TRID Rule, when does a consumer become contractually obligated on a credit transaction?

Under the TRID Rule, a consumer becomes contractually obligated on a credit transaction at the point of consummation of the loan transaction. Consummation refers to the time when the borrower becomes legally bound to the loan agreement, which is typically when the borrower signs the loan documents and the funds are disbursed. This is essential in the context of ensuring that all required disclosures about the transaction have been provided prior to this point, giving the consumer a clear understanding of their obligations.

This understanding is crucial for the parties involved, as it underscores the significance of the closing process and what it entails in terms of contractual commitment. Other stages of the process, such as notifying the lender of intent to proceed or receiving the Closing Disclosure, do not establish a contractual obligation, as they are merely preparatory steps leading up to the actual closing. By delineating the moment of consummation as the point of contractual obligation, the TRID Rule provides clarity and protects consumers during the lending process.