Which law established the three-day right of rescission?

The law that established the three-day right of rescission is the Truth in Lending Act (TILA), commonly referenced under Regulation Z. This provision allows borrowers to cancel certain types of loans—including refinances and home equity loans—within three business days of closing on the loan. This right is designed to protect consumers by ensuring they have time to reconsider their borrowing decisions and to understand fully the terms and implications of the loan agreement they have entered into.

In contrast, the other options listed focus on different regulatory aspects. The Real Estate Settlement Procedures Act (RESPA) primarily governs the disclosure of settlement costs and practices related to residential real estate transactions, but it does not provide a right of rescission. The Fair Credit Reporting Act (FCRA) focuses on consumer credit reporting and does not relate to loan rescission rights. The Gramm-Leach-Bliley Act emphasizes financial privacy and information sharing but does not address the right to rescind a loan. Understanding these distinctions highlights the specific protective measures offered by TILA in relation to consumer finance and lending practices.