The right of rescission provided under Regulation Z is the right to:

The right of rescission under Regulation Z is specifically designed to protect consumers in certain credit transactions, particularly when it involves their primary residence. This right allows borrowers the ability to cancel a credit transaction, such as a home equity loan or refinance, within three business days of closing. The intention behind this provision is to give consumers a chance to reconsider their decision, ensuring they have the necessary time to assess the terms and implications of the loan.

In a scenario where borrowers feel that the terms of the loan are unfavorable or if they believe they were misled or did not fully understand the agreement at the time of sale, this right empowers them to reclaim their initial investment and cancel the contract without penalty. By allowing consumers this opportunity for reflection and withdrawal, Regulation Z enhances consumer protection, fostering more informed and confident decision-making in financial matters.