Under Regulation Z, when is consummation defined to occur?

Consummation, as defined under Regulation Z, occurs when a consumer becomes contractually obligated on a credit transaction. This is a key distinction in real estate financing and consumer credit law. It marks the point at which a borrower has entered into a binding agreement, typically illustrated by signing the loan documents.

This definition helps clarify when the various consumer protections under Regulation Z begin, including disclosures related to the terms of credit, the cost of credit, and the borrower's rights. It is essential for ensuring that borrowers are aware of their obligations and the terms of the credit before they become legally bound to them.

Understanding that consummation is tied to the contractual obligation rather than the funding of the loan or other events is critical for professionals in real estate and lending, as it has direct implications for the timing of required disclosures and consumer rights. The other definitions provided in the choices relate to different phases of the transaction that do not trigger the regulatory requirements established by Regulation Z.