I’m not sure exactly what the CFPB was talking about but I assume it was in regards to those individuals with the right to rescind. You are not required to provide the LE, which is for shopping purposes, to a non-applicant that will have the right to rescind. However, you are required to provide the CD to anyone with the right to rescind, including a non-obligor in whose principal dwelling a security interest is or will be retained or acquired, if that person’s ownership interest in the dwelling is or will be subject to the security interest.
See the preamble to the final rule which says(p. 79783)https://www.gpo.gov/fdsys/pkg/FR-2013-12-31/pdf/2013-28210.pdf:
In rescindable transactions, the CD must be given separately to each consumer who has
the right to rescind under § 1026.23. In transactions that are not rescindable, the
CD may be provided to any consumer with primary liability on the obligation.