This year, Juneteenth was formally made a Federal holiday just a few days ahead of June 19, leaving those in the mortgage industry with questions about whether or not the day should be considered a business day for purposes of compliance. The Consumer Financial Protection Bureau (CFPB) has now released an interpretive rule to clarify mortgage requirements in regards to the new holiday.
“The federal recognition and celebration of Juneteenth was a welcome and important step toward healing the national legacy of slavery,” said CFPB Acting Director Dave Uejio. “We understand that the quick enactment of the federal Juneteenth legislation created interpretive questions and compliance challenges for the mortgage industry with respect to rescission of closed-end mortgages and certain time-sensitive mortgage disclosures. The mortgage industry can refer to today’s interpretive rule when determining how to treat June 19, 2021.”
Regulation Z of the CFPB’s mortgage rules establishes timing requirements, calculated in business days, for when borrowers must receive certain disclosures and when borrowers have the right to cancel some mortgages.
For rescission of closed-end mortgages and TILA-RESPA Integrated Disclosures, whether June 19, 2021, counts as a business day or federal holiday depends on when the relevant time period began. If the relevant time period began:
– On or before June 17, 2021, then June 19 was a business day.
– After June 17, 2021, then June 19 was a federal holiday.
The interpretive rule also explains that creditors are not prohibited from providing longer time periods than required, so if a time period began on, or prior to, June 17, 2021, creditors could still consider June 19, 2021, a federal holiday. Friday, June 18—the day of federal observance for the 2021 Juneteenth holiday—was considered a business day because when a federal holiday falls on a Saturday, the day of federal observance is considered a business day for these time-sensitive consumer protections.
