In many cases, when you have a loan, you are able to pay the entire loan off early with a lump sum, rather than continuing to make regular, scheduled payments over an extended time period. The general process by which this occurs is that you go to your loan provider and ask them to tell you the loan payoff amount if you paid on a certain date. This will calculate any outstanding balances, plus any accrued interest between then and the date such that when you give them that money by that time, you will be paying off the entire loan as it is at the time they get the payment.
Are there any laws governing the loan payoff process, and in particular, laws to protect the borrower for predatory practices?
A possible situation I'm considering is the following. The lender will tell you your payoff amount for a specific date and requests that you mail in a check. You send your check (and it is postmarked by the specific date) and their processing department decides to sit on the check and wait to cash it. In the meantime, your loan has continued to accrue interest such that your payoff amount no longer pays off the loan. In the worst case scenario, you think your loan is done, you stop checking in on it, and five years down the line, you're hit by a collector asking where their accrued interest payments are. In the best case scenario, your payoff amount is cashed late and you still have $5 left of accrued interest. You send another check to pay off that $5 but by the time it's cashed, you have another $0.30 to pay off and the cycle continues. There's also the issue that the lender may consider the date they received the check (rather than the post-marked date) as the official date the check is paid off, leading to the right amount not arriving at the right time (and the above ad infinitum scenario playing out).
Are there laws that protects the borrower by making lenders honor loan payoff quotes or governing when a payment should be counted as received (e.g., by the postmark date vs the actual arrived-on-our-desk date)? I'm sure there are other shady scenarios predatory lenders could use so I'm interested in more information than just the example scenario I described above.