Implications of 2022 Juneteenth Holiday on Residential Mortgage Transactions
In June of 2021 President Biden amended 5 U.S.C. 6103(a) to add “Juneteenth National Independence Day, June 19” to the list of Federal legal public holidays. Many regulatory provisions reference this list of holidays, including Regulation Z’s specific business day definition. However Regulation Z includes two definitions of “business day,” (specific and general) that apply to different disclosures.
General Business Day Definition
Under Regulation Z, the general business day definition defines a business day as “a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.” The general business day definition applies to the Loan Estimate, which must be delivered to a consumer (or placed in the mail to the consumer) no later than the third business day after receipt of the consumer’s completed application.
Specific Business Day Definition
Regulation Z also refers to a specific business day definition, which defines business days as all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a): New Year’s Day, the Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Juneteenth, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. The specific business day definition applies to the Closing Disclosure, which must be delivered to the consumer at least three business days prior to the date of consummation of the transaction, and to the Right of Rescission (for a refinance of a principal residence), which gives the consumer the right to rescind the transaction until midnight of the third business day following consummation.
Juneteenth 2022
For 2022, Juneteenth falls on Sunday, June 19, but will be observed by many creditors on Monday, June 20. The CFPB has clarified that when a fixed-date holiday falls on Sunday but is observed on Monday, the “observed” date is a business day in cases where the specific business day definition applies. Therefore, for purposes of the Closing Disclosure and Right of Rescission, Monday June 20 would be considered a business day, even if offices are closed. However for purposes of the Loan Estimate, the general business day definition applies and therefore Monday, June 20 would not be considered a business day, if a creditor’s offices are closed.
How can we help?
CLA is prepared to assist your institution. Our mortgage professionals can help you evaluate the impact this new rule has on your operations. We are here to know you and help you. Contact Us with any questions or to learn how we can assist your mortgage operations.
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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